Commercial general liability (CGL) insurance for manufacturers excludes workers compensation claims, automobile liability, professional services errors, pollution incidents, intentional acts, contractual liability beyond standard agreements, aircraft and watercraft operations, and liquor liability.
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The Insurance Services Office (ISO) CGL policy form contains comprehensive exclusions sections limiting coverage to traditional premises-operations and products-completed operations hazards, with excluded exposures requiring separate specialized insurance policies.Â
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Employee injuries fall under mandatory workers compensation insurance requirements, while vehicle accidents require commercial auto liability policies regardless of whether company-owned or employee-owned vehicles cause incidents during business operations.
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Professional liability exclusions eliminate coverage for errors in design specifications, engineering mistakes, architectural failures, and advisory services provided by manufacturers offering technical consultation alongside product manufacturing.Â
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Manufacturers employing engineers who specify product applications, create custom designs, or provide installation guidance require separate professional liability insurance (errors and omissions coverage) protecting against economic losses resulting from professional negligence. This exclusion distinguishes bodily injury and property damage covered by CGL from pure economic losses and professional service failures.
Pollution exclusions in standard CGL policies eliminate coverage for environmental contamination including chemical spills, hazardous waste disposal, air emissions, and groundwater pollution. Manufacturers handling chemicals, petroleum products, or industrial waste require separate pollution liability insurance covering gradual pollution, sudden and accidental releases, and regulatory defense costs.
The ISO absolute pollution exclusion applies even when pollution occurs during otherwise covered operations, forcing manufacturers with environmental exposure to purchase Environmental Impairment Liability (EIL) policies.
Intentional acts exclusions prevent coverage for damages the manufacturer deliberately causes or expects to occur, including assault, battery, false imprisonment, and knowing violation of safety regulations.
Expected or intended injury exclusions extend beyond criminal acts to encompass situations where reasonable persons would expect harm to result from their actions. Contractual liability exclusions eliminate coverage for liability assumed under contracts except for specific contract types defined in the policy including leases, easement agreements, and railroad sidetrack agreements, though additional insured endorsements can expand contractual liability coverage.
Employment-related practices liability including wrongful termination, discrimination, sexual harassment, and wage disputes require separate Employment Practices Liability Insurance (EPLI) rather than general liability coverage. Employee benefits liability covering errors in benefits administration, ERISA violations, and pension plan mismanagement similarly requires specialized policies.
Cyber liability exposures including data breaches, network security failures, and privacy violations are excluded from CGL policies, necessitating separate cyber insurance for manufacturers storing customer data or operating connected manufacturing systems.
Damage to the manufacturer’s own products or work (your work exclusion) eliminates coverage for defective products requiring replacement or repair, though this exclusion protects only the defective product itself rather than consequential damage caused by product failure. Products recall costs including notification, return shipping, and disposal expenses are excluded from CGL policies unless manufacturers purchase separate product recall insurance.
War, nuclear hazards, and governmental action exclusions eliminate coverage for damages arising from armed conflict, radioactive contamination, or seizure of property by governmental authorities.
To speak with an insurance specialist call (234) 231-9943 today.