Insurance Law> General Liability Insurance> Property Coverage

The CGL Policy Exclusion For "Your Product"

The comprehensive general liability policy is designed to provide coverage to businesses for liability to third parties for their personal injury or property damage. Coverage for damage to the insured's property is expected to be obtained through separate policies, and several exclusions in the CGL policy are directed toward excluding CGL coverage for the insured's property.

"Property damage" to "your product" arising out of it or any part of it

To understand the breadth of the exclusion, the definition of "your product" provided elsewhere in the policy should be reviewed:

"Your product":

a. Means:

(1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by:

(a) You;

(b) Others trading under your name; or

(c) A person or organization whose business or assets you have acquired; and

(2) Containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products.

b. Includes:

(1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product;" and

(2) The providing of or failure to provide warnings or instructions.

c. Does not include vending machines or other property rented to or located for the use of others but not sold.

Thus, coverage for damage to products manufactured, handled, or traded by the insured are excluded from coverage under the CGL policy, and it is anticipated that the insured will obtain such coverage under other types of policies such as products liability policies.

The definition of "your product" is refined from time to time. For example, it was made clear that the phrase "goods or products" does not include "real property" so that damage to buildings of the insured from completed operations of contractors was not excluded by Exclusion K.

Inclusion of warranties and representations in "your product" indicates that coverage for product-related personal injury claims and for defective product claims should be provided through product liability coverage rather than general liability coverage.