General Liability Premium Written
Underwriting a commercial general liability (CGL) policy for a manufacturing company.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premium Receivable — GL | Asset (+) | 8,000.00 | - |
| Written Premium — General Liability | Revenue (+) | - | 8,000.00 |
💡 Accountant's Note
CGL policies cover third-party bodily injury and property damage arising from business operations. Claims are often long-tail — bodily injury suits may take years to settle.
Practitioner & Systems Framework
💻 ERP Architecture
CGL underwriting data is entered into the underwriting system including the insured's operations description, turnover, payroll (for employers' liability), and prior claims history. The premium is rated using the underwriter's manual or a proprietary rating model. CGL is typically a claims-made or occurrence policy — the coverage trigger (claims-made vs. occurrence) must be correctly configured in the policy system as it determines which policy responds to future claims. Long-tail IBNR reserves are significant for CGL.
⚠️ Audit Flags
Auditors confirm the coverage trigger type (occurrence vs. claims-made) for each CGL policy — this is critical for determining which year's reserves respond to late-reported claims. For occurrence policies, IBNR for unreported claims arising in the underwriting year is a significant reserve. For claims-made policies, the run-off provision for extended reporting periods must be assessed. Verify that the underwriter is operating within their DUA, especially for large limits of indemnity.
📄 Required Documentation
Proposal form (insured's operations and risk details), premium computation and rate justification, coverage trigger confirmation (occurrence vs. claims-made), underwriter's authority sign-off, prior claims history, and signed policy schedule with limits and sublimits.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.