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General Liability Insurance Glossary
Thirty-eight commercial general liability terms, defined the way an adjuster reads them. Every entry tells you what it means, why it matters at claim time, and what to look for on your own policy — with a citation to the ISO form or Texas statute behind it.
This is the vocabulary Texas business owners are expected to already know when a claim lands. Most don't. That's not a failure of intelligence — it's a failure of anyone bothering to explain it.
Additional Insured
What it is. A person or company added to your policy so that your coverage responds to claims arising out of your work for them. Your general contractor, your landlord, and your customer all commonly demand it.
Why it matters at claim time. Being named on a certificate is not the same as being an additional insured on the policy. The certificate is a summary; the endorsement is the coverage. When a claim hits and the endorsement was never actually issued, the GC's carrier tenders to you, your carrier declines, and you are personally financing a defense you thought you had bought.
What to look for on your policy. Find the forms schedule and look for a CG 20 10 (ongoing operations) or CG 20 37 (completed operations). If your contract requires completed-operations coverage and you only have the CG 20 10, you are covered while you are on the job and uncovered the day you finish it — which is precisely when construction-defect claims arrive. See our General Liability coverage page.
Source: ISO forms CG 20 10 / CG 20 37; Texas Insurance Code Ch. 1811 (certificates of insurance).
Aggregate Limit
What it is. The most your policy will pay in total across the whole policy period, no matter how many separate claims occur.
Why it matters at claim time. Your per-occurrence limit is the number everyone quotes. The aggregate is the number that actually runs out. Three moderate claims in one year can exhaust a $2M aggregate and leave you bare for the fourth — while you are still paying premium and still believing you have a $1M policy.
What to look for on your policy. The declarations page shows a General Aggregate and, separately, a Products-Completed Operations Aggregate. Two different buckets. Confirm whether your aggregate is annual or per-project.
Source: ISO CG 00 01, Section III — Limits of Insurance.
Anti-Indemnity Statute (Texas)
What it is. Texas law that voids most contract clauses requiring a subcontractor to indemnify a general contractor or owner for the GC's or owner's own negligence, in construction contracts.
Why it matters at claim time. A GC hands you a contract with a broad indemnity clause. You sign it, assuming you are now on the hook for everything. In Texas, much of that clause may be unenforceable — but only if someone knows to raise it. The statute has carve-outs, and additional-insured obligations are treated differently from indemnity obligations. Signing without understanding which is which is how subcontractors end up funding a general contractor's mistake.
What to look for on your policy. This one is not on your policy — it is in your contract. Bring the contract and the policy to the same table before you sign. Related: surety and contract requirements.
Source: Texas Insurance Code Ch. 151 (Construction Contracts).
Bodily Injury
What it is. Physical injury, sickness, or disease sustained by a person — including death that results from it.
Why it matters at claim time. "Bodily injury" is narrower than people assume. Purely emotional distress with no physical manifestation often falls outside it. That gap is where a claim you assumed was covered becomes a claim you are defending out of pocket.
What to look for on your policy. Section V — Definitions. Read whether your form's bodily injury definition includes "mental anguish." Some carriers add it; some pointedly do not.
Source: ISO CG 00 01, Section V — Definitions.
Care, Custody, or Control Exclusion
What it is. An exclusion removing coverage for damage to property in your care, custody, or control.
Why it matters at claim time. This is the exclusion that surprises contractors most. You drop a beam through the floor you are standing on — the floor is the customer's property, in your control, and the CGL walks away. It is not a coverage failure; it is the policy working exactly as written. It is also fixable, and most people do not find out until the claim.
What to look for on your policy. Section I, Coverage A, Exclusion j. Then ask what installation floater or rigger's liability coverage would close it.
Source: ISO CG 00 01, Coverage A, Exclusion j — Damage to Property.
Certificate of Insurance (COI)
What it is. A one-page snapshot proving coverage exists. It is evidence of insurance. It is not insurance.
Why it matters at claim time. A COI confers no rights. It cannot add coverage the policy does not contain, and in Texas it is unlawful to issue one that misrepresents the policy. The certificate says "Additional Insured: Yes" — but if the endorsement was never attached, the claim is denied and the certificate is worth exactly the paper it is printed on.
What to look for on your policy. Do not look at the COI. Ask for the endorsement itself. Any broker who will not send it is telling you something.
Source: Texas Insurance Code Ch. 1811.
Chapter 95 (Texas)
What it is. A Texas statute limiting a property owner's liability when an independent contractor's employee is injured on the owner's property — generally requiring that the owner both exercised control over the work and had actual knowledge of the danger.
Why it matters at claim time. If you are the property owner, Chapter 95 is a shield. If you are the contractor, it means the owner's carrier will point at you, and your general liability policy is the one paying. Which side of the statute you are on changes what limits you should be carrying.
What to look for on your policy. This lives in the contract and the facts, not the declarations page — but it drives how much liability you should be buying.
Source: Texas Civil Practice & Remedies Code Ch. 95.
Claims-Made vs. Occurrence
What it is. Two triggers. An occurrence policy responds to injury that happened during the policy period, whenever the claim is made. A claims-made policy responds to claims reported during the policy period.
Why it matters at claim time. Standard CGL is occurrence-based, which is why a 2019 policy can still pay a 2026 construction-defect claim. Professional liability and cyber liability are usually claims-made — meaning if you cancel the policy, coverage stops protecting your past work unless you buy tail coverage. Contractors who let a claims-made policy lapse after a job discover this years later, in a deposition.
What to look for on your policy. Top of the declarations page. If it says claims-made, find your retroactive date immediately.
Source: ISO CG 00 01 (occurrence) vs. CG 00 02 (claims-made).
Completed Operations
What it is. Coverage for bodily injury or property damage arising out of your work after you have finished it and left the site.
Why it matters at claim time. Construction-defect claims almost never arrive while you are on the job. They arrive two, five, eight years later, when the building moves and someone sues everyone who touched it. If your additional-insured endorsement covers ongoing operations only, you have coverage during the least likely window and none during the most likely one.
What to look for on your policy. The Products-Completed Operations Aggregate on the declarations page, and whether your additional-insured endorsement is a CG 20 37.
Source: ISO CG 00 01, Section V — "Products-Completed Operations Hazard."
Contractual Liability / Insured Contract
What it is. General liability policies exclude liability you assume by contract — then give a portion of it back for a defined set of "insured contracts."
Why it matters at claim time. The exclusion is broad and the giveback is narrow. When you sign a contract promising to indemnify someone, the question is whether that promise falls inside the "insured contract" definition. If it does not, you made a promise your insurance will not fund — and you will be funding it yourself.
What to look for on your policy. Coverage A, Exclusion b, and the "Insured Contract" definition in Section V. Read them together, in that order.
Source: ISO CG 00 01, Coverage A, Exclusion b; Section V — Definitions.
Declarations Page
What it is. The front page of the policy. Named insured, policy period, limits, and the schedule of forms and endorsements.
Why it matters at claim time. Every coverage argument starts here. The forms schedule tells you what is actually attached — which is the only list that matters, and the one almost nobody reads.
What to look for on your policy. The forms list. Then pull each form and read it. That is the entire job.
Source: ISO CG 00 01.
Deductible vs. Self-Insured Retention (SIR)
What it is. With a deductible, the carrier typically defends and pays, then bills you back. With an SIR, you pay first — and the carrier's duty to defend may not even trigger until the SIR is exhausted.
Why it matters at claim time. The difference is who writes the first check and who controls the defense. A business that thinks it has a $25,000 deductible but actually has a $25,000 SIR discovers, on day one of a lawsuit, that it is hiring its own lawyer.
What to look for on your policy. The declarations page will show one or the other. If it says SIR, ask precisely when the carrier's duty to defend begins — and get the answer in writing.
Source: Policy-specific; not standard in unmodified ISO CG 00 01.
Defense Costs — Inside vs. Outside the Limits
What it is. Whether the money spent defending you comes out of your limit of liability or sits on top of it.
Why it matters at claim time. This is the single most expensive sentence in the policy. On a standard CGL, defense is generally outside the limits — a $1M policy can spend $400K defending you and still have $1M to settle. On many surplus-lines, professional, and cyber forms, defense is inside the limits — that same $400K defense leaves you $600K to settle a $1M claim, and you fund the difference. Same limit on the declarations page. Wildly different policy.
What to look for on your policy. Section I — "Supplementary Payments" (outside) versus limit-eroding defense language (inside). If you carry surplus-lines or professional liability, check this today.
Source: ISO CG 00 01, Supplementary Payments — Coverages A and B.
Duty to Defend
What it is. The carrier's obligation to provide and pay for your legal defense — broader than its duty to indemnify.
Why it matters at claim time. The duty to defend is triggered by the allegations in the lawsuit, not the truth of them. Texas applies the "eight corners rule": the four corners of the pleading against the four corners of the policy. This means a carrier may owe you a defense against a claim it will never have to pay — which is exactly the protection you are buying. Most general liability claims cost more to defend than to settle.
What to look for on your policy. Section I — Coverage A, 1.a. And confirm defense is outside the limits.
Source: Texas "eight corners" doctrine; ISO CG 00 01.
Each Occurrence Limit
What it is. The most the policy pays for any single occurrence.
Why it matters at claim time. One "occurrence" can include many claimants. A single event injuring four people is generally one occurrence — so four claimants share one limit, not four limits.
What to look for on your policy. Declarations page, and the definition of "occurrence" in Section V.
Source: ISO CG 00 01, Section III.
Endorsement
What it is. A form that modifies the policy — adding, restricting, or clarifying coverage.
Why it matters at claim time. The base CGL form is nearly identical from carrier to carrier. The endorsements are where policies actually differ, and where coverage is quietly removed. Two quotes at the same limit and the same premium can be entirely different products once you read the endorsements.
What to look for on your policy. The forms schedule. Count them. Read every one whose title begins with "Exclusion."
Source: ISO CG 00 01 and attached endorsements.
Exclusion
What it is. Language removing coverage that the insuring agreement otherwise granted.
Why it matters at claim time. Coverage disputes are won and lost in the exclusions, not the insuring agreement. Under Texas law the carrier bears the burden of proving an exclusion applies — but that only helps you if someone makes them prove it.
What to look for on your policy. Coverage A, Exclusions a through q. Then every endorsement titled "Exclusion —."
Source: ISO CG 00 01, Section I.
General Aggregate
What it is. The total the policy will pay for premises/operations and personal & advertising injury claims during the policy period — separate from the products-completed operations bucket.
Why it matters at claim time. It erodes. Nobody tells you when it is half gone. You find out when the fourth claim arrives.
What to look for on your policy. Declarations page. Then ask whether a per-project aggregate endorsement is available — for contractors running multiple jobs, it is frequently the highest-value endorsement on the policy.
Source: ISO CG 00 01, Section III.
Indemnification / Hold Harmless Agreement
What it is. A contract clause where one party agrees to absorb another party's liability.
Why it matters at claim time. You can promise anything in a contract. Your insurance will only fund what falls within "insured contract." The gap between what you promised and what your policy funds is uninsured — and it is yours personally.
What to look for on your policy. Read the indemnity clause and the "Insured Contract" definition side by side before you sign. Not after.
Source: ISO CG 00 01, Section V; Texas Insurance Code Ch. 151.
Liability Tower
What it is. Your layered structure of coverage: the primary general liability policy at the bottom, then umbrella, then excess layers stacked above it.
Why it matters at claim time. A tower only works if each layer attaches cleanly to the one below. If your umbrella requires $1M/$2M underlying and your primary is written at $1M/$1M, there is a gap — and the umbrella does not drop down to fill it. The tower looks like $6M on paper and collapses at the seam. This is one of the most common and least-noticed defects in a mid-market program. We wrote about it here: what every Texas business owner should know about CGL.
What to look for on your policy. Compare the umbrella's Schedule of Underlying Insurance against your actual primary declarations page. Limits, forms, and policy periods must all line up.
Source: Policy-specific; see umbrella Schedule of Underlying Insurance.
Loss Run
What it is. The carrier's official history of your claims — dates, reserves, payments, status.
Why it matters at claim time. Loss runs drive your pricing more than almost anything else. They are also frequently wrong — open reserves left on closed claims, claims coded to the wrong policy year. An inflated reserve that nobody challenged is a premium you will pay for three more years.
What to look for on your policy. Request loss runs from your carrier annually. Read them. Dispute reserves that do not reflect reality.
Source: Carrier-issued.
Named Insured
What it is. The entity actually named on the declarations page — as distinct from others who qualify as "insureds" under the policy.
Why it matters at claim time. Businesses restructure. They add an LLC, spin off an entity, buy a building through a separate holding company. The new entity is not on the policy, and nobody told the carrier. When the claim lands on the entity that is not named, there is no coverage — not because of a dispute, but because that company was never insured.
What to look for on your policy. Every legal entity you own should be on the declarations page or added by endorsement. Check after every corporate change.
Source: ISO CG 00 01, Section II — Who Is An Insured.
Occurrence
What it is. An accident, including continuous or repeated exposure to substantially the same general harmful conditions.
Why it matters at claim time. In construction defect, "how many occurrences?" is a million-dollar question. One defective installation repeated across forty units — is that one occurrence or forty? The answer determines whether you have one limit or forty, and it is litigated constantly.
What to look for on your policy. Section V — Definitions. And any endorsement modifying "occurrence" for construction defect.
Source: ISO CG 00 01, Section V.
Per-Project Aggregate
What it is. An endorsement giving each project its own separate general aggregate, instead of one aggregate shared across all your jobs.
Why it matters at claim time. Without it, a bad claim on Job A eats the limit protecting Jobs B, C, and D. For a contractor running several projects, this is often the highest-value endorsement available — and it is frequently missing because nobody asked for it.
What to look for on your policy. Forms schedule — look for a designated construction project general aggregate endorsement.
Source: ISO designated-project aggregate endorsement.
Personal and Advertising Injury (Coverage B)
What it is. Coverage for offenses such as libel, slander, malicious prosecution, wrongful eviction, copyright infringement in your advertising, and use of another's advertising idea.
Why it matters at claim time. Most business owners have no idea this coverage exists. A defamation claim from a competitor, or a copyright demand over an image on your website, falls under Coverage B — not Coverage A. It has its own limit and its own exclusions.
What to look for on your policy. Declarations page — Personal & Advertising Injury Limit. And check for a Coverage B exclusion endorsement, which some carriers quietly attach.
Source: ISO CG 00 01, Coverage B.
Premises and Operations
What it is. The core of the CGL: claims arising from your physical location and from your ongoing work.
Why it matters at claim time. This is the slip-and-fall bucket. It is also where a "routine" claim quietly becomes a severe one — which is why our General Liability page leads with a $185,000 slip-and-fall.
What to look for on your policy. Your classification codes and exposure basis. If your operations are misclassified, you are either overpaying or uncovered.
Source: ISO CG 00 01, Coverage A.
Primary and Noncontributory
What it is. Contract language, backed by an endorsement, requiring your policy to pay first and to not seek contribution from the other party's insurance.
Why it matters at claim time. Without the endorsement, two carriers spend six months arguing about who pays while your defense bills accrue. With it, the order of payment is settled before the claim.
What to look for on your policy. Forms schedule — CG 20 01 or carrier equivalent. Almost every GC contract requires it; a meaningful share of subcontractor policies do not carry it.
Source: ISO CG 20 01.
Products-Completed Operations Aggregate
What it is. A separate aggregate limit applying only to claims arising from your finished work or your products.
Why it matters at claim time. It is a separate bucket from the general aggregate. Contractors routinely assume they have $2M total when they actually have $2M general and $2M products-completed — or, worse, assume they have products-completed coverage when an endorsement removed it.
What to look for on your policy. Declarations page. If the Products-Completed Operations Aggregate shows as Excluded, stop and call your broker today.
Source: ISO CG 00 01, Section III.
Prompt Payment of Claims Act (Texas)
What it is. Texas law setting deadlines for carriers to acknowledge, accept or reject, and pay claims — with statutory penalty interest and attorney's fees for violations.
Why it matters at claim time. Carriers have clocks running on them, and most policyholders never invoke them. A carrier sitting on your claim past the statutory deadline may owe you penalty interest on top of the claim. Knowing the deadline changes the conversation.
What to look for on your policy. Not on the policy — in the statute. Document every date you send the carrier something.
Source: Texas Insurance Code Ch. 542, Subchapter B.
Reservation of Rights
What it is. A letter from the carrier saying it will defend you but reserves the right to later deny coverage.
Why it matters at claim time. A reservation of rights letter means the carrier's interests and yours have started to diverge. It is not a denial — but it is a signal that you should read every word and consider whether you need independent counsel. Most insureds file it away without understanding what it means.
What to look for on your policy. If you receive one, read the specific policy provisions it cites. Those are the grounds on which they intend to leave.
Source: Carrier-issued; Texas law on defense under reservation.
Retroactive Date
What it is. On a claims-made policy, the date before which prior acts are not covered.
Why it matters at claim time. Move carriers and let the retroactive date advance, and you have just erased coverage for everything you did before that date. It is the single most damaging unforced error in claims-made insurance, and it happens quietly at renewal.
What to look for on your policy. Declarations page, on any claims-made policy. It should be your original inception date, not this year's.
Source: ISO claims-made forms.
Self-Insured Retention (SIR)
What it is. An amount you must pay out of pocket before the policy responds — including, often, defense costs.
Why it matters at claim time. The critical question is whether the carrier's duty to defend begins immediately or only after the SIR is exhausted. Get that answer in writing before you bind, not after you are sued.
What to look for on your policy. Declarations page and the SIR endorsement.
Source: Policy-specific.
Subcontractor Warranty
What it is. An endorsement conditioning your coverage on your subcontractors carrying specified limits, naming you as additional insured, and signing written agreements.
Why it matters at claim time. This is a trap for general contractors. If you did not collect the required certificates and agreements from your subs, the carrier can deny the claim — not because the loss is excluded, but because you breached a condition. It converts your subcontractor's uninsured mistake into your uninsured loss.
What to look for on your policy. Forms schedule. If a subcontractor warranty is attached, your COI collection process is now a coverage requirement, not paperwork. Related: contractor bonding requirements.
Source: Carrier-specific endorsement.
Sublimit
What it is. A smaller limit sitting inside a bigger one, applying to a specific type of loss.
Why it matters at claim time. Your policy says $1M. The sublimit for the exposure you actually had says $50,000. Both are true. The sublimit wins.
What to look for on your policy. Anywhere on the declarations page a number appears that is smaller than your main limit, ask what it applies to.
Source: Policy-specific.
Subrogation
What it is. The carrier's right, after paying your claim, to step into your shoes and pursue whoever actually caused the loss.
Why it matters at claim time. Subrogation is how carriers recover money — and how your customer's carrier may come after you.
What to look for on your policy. Section IV — Transfer of Rights of Recovery.
Source: ISO CG 00 01, Section IV.
Umbrella / Excess Liability
What it is. Coverage sitting above your primary limits. An umbrella may also drop down to cover some things the primary does not; excess generally just follows the primary's form.
Why it matters at claim time. People use the words interchangeably. They are not the same product. An excess policy that "follows form" inherits every exclusion in your primary. An umbrella may be broader — or may not be, depending on the form.
What to look for on your policy. Whether the form says "follow form," and what its Schedule of Underlying Insurance requires.
Source: Policy-specific.
Waiver of Subrogation
What it is. An endorsement in which your carrier gives up its right to pursue a specific party — usually your customer or general contractor — after paying a claim.
Why it matters at claim time. Nearly every commercial contract demands it. If you signed the contract but never obtained the endorsement, you have promised something your carrier has not agreed to — and you may have impaired your own coverage by waiving a right you had no authority to waive.
What to look for on your policy. Forms schedule — CG 24 04 or a blanket equivalent.
Source: ISO CG 24 04.
XCU (Explosion, Collapse, Underground)
What it is. Three hazards — explosion, collapse, and underground property damage — that some general liability policies exclude for certain contracting classes.
Why it matters at claim time. If you excavate, blast, shore, or work near utilities and your policy carries an XCU exclusion, your single most likely severe loss is the one that is not covered. Many general contractors' contracts explicitly require XCU coverage to be included; many subcontractors' policies quietly exclude it.
What to look for on your policy. Forms schedule — look for an explosion, collapse, or underground property damage exclusion endorsement. If you dig, get this answered before you bid.
Source: ISO exclusion endorsements.
Send us your policy. We'll read it the way an adjuster would.
You've just read the vocabulary. Now find out what your actual policy says. A licensed 4J broker reads your declarations page and forms schedule line by line — additional insured endorsements, defense inside or outside the limits, the seams in your liability tower — and gives you a written summary of what you're actually buying.
Request a Coverage Review Call (469) 756-8776Deon R. Williams spent his career on the other side of the claim — as a claims adjuster and SIU investigator — before founding 4J. He reads policies looking for the gaps that only become visible after a loss.
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