Everything You Every Wanted to Know About the CGL, Part 3

If you're considering forming a captive insurance company as part of your overall risk management strategy, you probably have a lot of questions. In this webinar we look at:

1.) Risk -- what it is; what it isn't; how we can pay for it
2.) Insurance -- what it is; what it isn't
3.) Forming and running the captive

It's on Friday, January 25 at noon.  You can sign up here.

​   The CGL allows an individual to sue for two types of damages: bodily injury and property damage.  The policy defines the former as, “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.”  According to the dictionary, “bodily” means “of or pertaining to the body,” which, in turn, means, “the entire material structure and existence of an organism.”  Injury means, “to undergo physical harm.”  Combining these two definitions yields the following definition: “physical harm to the material structure of an organism” -- an unsurprising conclusion.  The policy also covers damages from sickness or disease.  These are somewhat similar terms to the layman, although using the conjunction “or” to separate them implies a meaningful difference.  “Disease” is, “an abnormal condition of an organism or part, especially as a consequence of infection, inherent weakness, or environmental stress.”  On the other hand, “sick” means “suffering from or affected with a physical illness.”  The difference between the two seems very nuanced.  The former is perhaps more severe and more likely to be resulting from external events under the control of the insured (asbestos would be a potential example), while the latter appears to be something such as an extended cold.    

    Let’s apply these definitions to a “slip and fall” in which the plaintiff breaks a bone and also contracts pneumonia while in the hospital.  The broken bone is clearly a “bodily injury” while the pneumonia is either a “sickness” or “disease.”  We can more or less apply these definitions to any situation where the plaintiff’s body sustains physical damage as well as some type of infection and arrive at the same result: coverage for the damage.

   Finally, let’s discuss the “including death resulting from any of these at any time” clause.  The purpose of this clause is to address one of the most potentially expensive results of a case from a wrongful act: wrongful death:

“Any fatality caused by the wrongful acts of another may result in a wrongful death claim. Many wrongful death claims are based upon death resulting from negligence, for example following a motor vehicle accident caused by another driver, a dangerous roadway or defective vehicle, or medical malpractice.[2]”

This is an incredibly complicated are of law, far beyond the scope of a blog post.  Suffice it to say it’s probably covered.

   Next, I’ll take a look at property damage.

​   Dictionary definitions are from The American Heritage Dictionary, (c) 1985