Does Betty's Commercial General Liability (CGL) Coverage Form cover the cost of withdrawing her birdhouses due to environmental concerns?

The correct response indicates that Betty's Commercial General Liability (CGL) Coverage Form does not cover the costs associated with withdrawing her birdhouses due to environmental concerns because expenses related to product withdrawal are specifically excluded under the terms of a typical CGL policy.

CGL policies are designed to cover third-party bodily injury, property damage, personal injury, and advertising injury claims, but they do not extend to costs incurred by businesses to withdraw products from the market, even if those actions are taken due to environmental concerns or the intent to prevent potential future claims.

This exclusion is put in place because taking a product off the market, regardless of the reason, is considered an operational cost related to the business decision rather than a liability that would be covered by insurance. Therefore, any financial burden incurred from such product withdrawal would not be eligible for coverage under a CGL policy.

This understanding highlights the importance of reading and understanding the exclusions within an insurance policy, ensuring that business owners like Betty are aware of what is and isn’t covered as they make operational decisions.