Rules
Part of General liability coverage: what counts as third party, and what does not
Handling a general liability review, offer, or disputed claim in three steps
This general liability review guide gives three practical steps for checking your policy, comparing an offer, and responding to a coverage decision.
"Review" gets used for three different jobs, and the three need different habits. A general liability review may mean checking a policy you already hold, reviewing an offer somebody has made you, or reviewing a decision your insurer has reached.
This guide gives three practical steps for each situation, in the order you are likely to need them.
What to take away
- Reviewing a policy is a document exercise. The declarations page and the schedule of forms answer most questions faster than any conversation.
- Reviewing an offer means comparing structure. Two quotes on the same limit can behave differently in every way that matters.
- Reviewing a coverage decision starts with one requestthe specific policy provision the insurer relied on, in writing.
- A complaint to your state insurance department is about conduct. It does not decide who was right about the wording.
Review one: the policy you already hold
Use these three steps with the actual documents open, not from memory, and give the review an hour: check the declarations, check the forms and endorsements, then check what has changed in the business.
Policy Review: Three Passes
- Declarations pagenamed insured, operations, locations
- Schedule of formsmark unknown endorsements
- Exposurelist business changes since renewal
- Safety controlsOSHA program material
Pass one, the declarations page. Read the named insured and check it is still the entity that trades. Businesses restructure, add a second company, or keep operating in a name that no longer appears on the policy. Then read the description of operations and the classification, and say out loud whether they describe what you did last quarter. Then the locations, the policy period, and the trigger basis.
Pass two, the schedule of forms and endorsements. This is the list of every document that makes up your contract. Work down it and mark anything you cannot identify. A common standard form is the ISO Commercial General Liability Coverage Form, CG 00 01; the edition and any changes matter. Examples of endorsement numbers to identify include CG 20 10 and CG 20 37, which concern additional insured coverage. Check the full form title and edition on your policy rather than relying on the number alone. The point is not to become a coverage lawyer. It is to produce a short list of questions, because an endorsement you have never heard of is either doing nothing or doing something.
Pass three, the exposure. Write down what changed in the business since the last renewal: new services, new materials, work at height, a first employee, a vehicle, a subcontractor, a site in another state, a new class of customer. Anything on that list that has not been reported is a gap you are carrying on purpose without having decided to.
Safety controls belong in the same review, because they are the only input to your terms you can improve deliberately. The OSHA material on safety and health programs is a reasonable starting point for the part of this that is about the work rather than the paperwork.
Review two: an offer in front of you
Use these three steps to review an offer. First, get the full policy wording, not just the proposal summary. Second, line up the offers on structure using the comparison table below. Price is the last thing to look at, and by itself it tells you nothing. Third, ask the broker or insurer in writing to explain any differences you cannot resolve before you bind.
Compare Offers Before Price
Offer A
- Trigger basis
- Occurrence
- Limit structure
- Per claim
- Defense costs
- Inside limit
- Sub-limits
- Smaller ceiling
- Deductible
- Applies to defense
- Endorsement exclusions
- Added
Offer B
- Trigger basis
- Claims-made
- Limit structure
- Aggregate
- Defense costs
- Outside limit
- Sub-limits
- Headline limit
- Deductible
- Settlement only
- Endorsement exclusions
- Removed
Review two: an offer
| What to line up | Why two offers can differ |
|---|---|
| Trigger basis | Occurrence and claims-made policies protect different periods of your work |
| Limit structure | Per claim, per occurrence, and annual aggregate are separate ideas |
| Defense costs | Whether they sit inside the limit or outside it changes what the limit is worth |
| Sub-limits | Individual categories can carry a much smaller ceiling than the headline |
| Deductible or retention | Its size, and whether it applies to defense as well as to settlement |
| Exclusions added by endorsement | The differences between two offers usually live here |
| Required endorsements | Whether the wording your contracts demand is actually available |
| Exposure basis and audit | What the premium will be recalculated against after the year ends |
Before binding, confirm the full wording, the form and edition that will be used, and what has been added or removed by endorsement. The market context for that conversation, including which kind of carrier you are dealing with, is in the guide to evaluating insurers without a ranking.
Review three: a decision you disagree with
Use these three steps when you disagree with a claim decision. First, request the insurer's written position and the specific policy provisions it relies on. Second, compare those provisions with the complete forms and endorsements in your policy, and identify whether the dispute concerns coverage, the amount, or liability. Third, meet the policy's notice and cooperation requirements, keep records of communications, and get legal advice promptly if significant money or a deadline is at stake.
Responding to Insurer Decisions
What shape is the insurer's response?
Reservation of rights -> Read, keep, note flagged provisions
Coverage position or denial -> Ask for specific provisions in writing
A reservation of rights. The insurer will act, usually by funding a defense, while stating it has not accepted that it must indemnify. This is normal. Read it, keep it, and note which provisions it flags, because those are the questions that will matter later.
A coverage position or denial. Ask, in writing, for the specific provisions relied on, quoted, with the endorsement numbers. A denial that names no clause is not something you can evaluate. On common ISO CG 00 01 forms, provisions that may matter include exclusions for expected or intended injury, contractual liability, pollution, auto liability, and damage to your work; the wording and endorsements in your policy control. Once you have the clause, read it against the schedule of forms to confirm it was actually part of your policy for the relevant period.
A dispute about amount or liability. This is not a coverage argument at all. It is a disagreement about what happened or about what it is worth, and what a court may award under the heading of damages covers more ground than a repair bill. It runs through a different process.
Separating those three is the whole skill, and the way a coverage question gets taken apart step by step is set out in the worked situations.
Your state insurance department handles complaints about insurer conduct, such as delay, failure to communicate, or misrepresentation of the wording. Use the National Association of Insurance Commissioners' State Insurance Departments directory to find the official agency for your state, then follow its consumer complaint form or online process. The avenue is real and generally free; the department's process and response times vary.
A state insurance department does not decide what your contract means. A complaint also does not replace policy notice requirements or any deadline for bringing a legal action; those requirements vary, so do not wait on the complaint process if a deadline may apply. For a coverage dispute or anything with money at stake, hire a lawyer in your state who reads policies for a living.
Put the review on a calendar
- Set a date around sixty days before renewal so there is time to fix what you find.
- Reread the description of operations and the classification every year without fail.
- Keep a running note through the year of changes to report, so the renewal is not a memory test.
- Re-collect subcontractor evidence on a schedule rather than when you remember.
- Keep expired policies. A claim about old work is answered by the policy in force then, not the one you hold now.
The habit of reading the paperwork rather than the summary is the same one described in the renewal reading guide, and the reason it pays off is that the answers were always in documents you already owned. The line's boundaries are in the main guide to this coverage.
Common questions
How long should a policy review take?
An hour a year for a small business, plus a short note every time something changes. The long version is only long the first time, because after that you are comparing against last year's notes.
Can I ask my broker to do the review for me?
You can and you should ask for their read, but ask specific questions rather than "is everything fine". A question naming a contract clause or a change in your operations gets a useful answer. An open one gets reassurance.
The insurer wants a recorded statement. Do I have to give one?
Cooperation is usually a condition of the policy, so refusing outright can create its own problem. Ask what is being sought and why, and where the claim involves any real exposure, take advice before you sit down for it.
Does complaining to the state department hurt my renewal?
Retaliation is regulated, and the department can explain what protections apply where you are. The more common practical concern is time: complaint procedures and response times vary, and a complaint is not a substitute for meeting your own deadlines under the policy or applicable law.
