How to Complete the ACORD 126: Field-by-Field Guide

Premises Address

What it is asking: The full street address of each location where the insured's business operations are conducted, including any satellite offices, warehouses, job sites (if permanent), or retail locations.

Why the underwriter needs it: Location determines rate territory, which affects premium. Some locations (urban areas, high-crime zip codes, flood zones) carry higher rates. Carriers also verify that each listed location falls within their underwriting appetite for that state.

Common mistake: Listing only the main office and omitting satellite locations, warehouses, or secondary job sites where employees regularly work.

Tip: If the business operates from multiple locations, attach a schedule. Do not compress multiple locations into one entry — each address needs its own line with square footage and occupancy description.

Square Footage

What it is asking: The total usable square footage of each premises location.

Why the underwriter needs it: Square footage is one of the key rating factors for premises liability — particularly for retail, restaurant, and service businesses where customers come to the location. A 500 sq ft coffee shop has very different exposure than a 10,000 sq ft warehouse.

Common entries: For office-based businesses: 1,000–5,000 sq ft. For warehouses: 10,000–100,000 sq ft. For retail: 500–20,000 sq ft.

Tip: Use the total leasable area, not just the area the client uses. If a tenant occupies 3,000 sq ft in a 50,000 sq ft building, list 3,000 sq ft. The landlord's policy covers the common areas.

Owned or Leased

What it is asking: Whether the insured owns the building or leases it from a landlord.

Why the underwriter needs it: Leased premises often require the insured to add the landlord as an additional insured. Owned premises trigger fire legal liability questions. The answer also affects whether building coverage (ACORD 140) is needed in addition to GL.

Tip: If leased, check whether the lease requires the tenant to name the landlord as additional insured on the GL policy. Most commercial leases do — and if the client is not complying with this requirement, they are potentially in breach of their lease. Flag this for your client at the time of application.

Classification / GL Classification Code

What it is asking: The ISO GL classification code that best describes the insured's operations. This is a numeric code from the Insurance Services Office (ISO) classification system — different from the SIC code on the ACORD 125.

Why the underwriter needs it: GL classification codes determine the base rate applied to the exposure base (revenue, payroll, square footage, or units, depending on the classification). Using the wrong code can result in significantly under- or over-priced coverage, and the carrier may audit and adjust the classification after binding.

Common codes: 91340 (Contractors — Not Otherwise Classified), 41650 (Restaurants), 61217 (Offices — Professional), 44070 (Retail Stores)

Tip: If you are uncertain of the correct GL class code, provide a detailed written description of operations and let the underwriter assign the code. It is better to ask than to use a code that is technically incorrect — misfiling a class code is an E&O risk.

Description of Operations

What it is asking: A narrative description of what the business does, specifically as it relates to general liability exposure. This is separate from (and should complement) the description on the ACORD 125.

Why the underwriter needs it: The GL underwriter needs to understand the activities that could cause bodily injury or property damage to third parties. A detailed description prevents classification disputes and helps the underwriter identify whether any endorsements, exclusions, or supplemental applications are needed.

Example: "Commercial cleaning company provides janitorial services to office buildings and retail spaces. No residential clients. All cleaners are W-2 employees, not independent contractors. Client provides all equipment and supplies. No use of abrasive chemicals or floor stripping chemicals."

Tip: Mention what the business does NOT do if it excludes common hazardous activities for their industry. An HVAC contractor who does not do refrigerant work, or a landscaper who does not apply pesticides, should say so — it often results in better pricing.

Each Occurrence Limit

What it is asking: The maximum amount the policy will pay for any single claim or occurrence. This is the most commonly referenced limit on a GL policy.

Why the underwriter needs it: The per-occurrence limit determines the maximum exposure per claim event and is a key rating factor. Higher limits require carrier approval above certain thresholds.

Common entries: $1,000,000 per occurrence is the market standard and required by most contracts. $2M occurrence is increasingly common on larger accounts or where umbrella coverage is not purchased.

Tip: Check what limits the client's contracts and leases require. Most commercial leases and general contractor subcontracts specify a minimum occurrence limit — often $1M or $2M. Requesting lower limits to save premium will put the client in breach of contract.

General Aggregate Limit

What it is asking: The maximum total amount the policy will pay for all claims combined during the policy period, excluding products/completed operations claims.

Why the underwriter needs it: The aggregate cap is critical for accounts with higher claim frequency potential. Once the aggregate is exhausted, the policy pays no further claims.

Standard: The general aggregate is almost always 2x the per-occurrence limit. A $1M occurrence / $2M aggregate policy is the market standard.

Tip: For businesses with high claim frequency risk (restaurants, habitational, contractors with many small projects), discuss whether the aggregate limit is adequate or whether a per-project or per-location aggregate endorsement makes sense.

Products and Completed Operations Aggregate Limit

What it is asking: The aggregate limit that applies specifically to claims arising from products the business has sold, or work it has completed (i.e., after the job is done and the client has left).

Why the underwriter needs it: Products and completed operations is a separate coverage bucket from premises and ongoing operations. For contractors and manufacturers, this is often the highest-risk coverage bucket because claims can arise years after the work is done.

Tip: For contractors, never request exclusion of products/completed operations coverage to save money. This is one of the most common and costly mistakes in commercial GL — a contractor who injures someone after completing a job is exposed without this coverage.

Personal and Advertising Injury Limit

What it is asking: The limit for claims arising from libel, slander, copyright infringement, wrongful eviction, and similar offenses.

Why the underwriter needs it: Digital and social media operations have dramatically increased personal and advertising injury exposure for many businesses. A business that posts content online or advertises on social media has meaningful exposure.

Tip: Businesses that publish content, run advertising campaigns, or operate social media accounts should note this in the operations description. Some carriers offer enhanced personal and advertising injury limits or endorsements — especially valuable for marketing agencies and media companies.

Fire Legal Liability Limit (Damage to Rented Premises)

What it is asking: The maximum the policy will pay if the insured accidentally causes fire damage to a building they are renting.

Why the underwriter needs it: Tenants are often held responsible for fire damage to their rented space even if the fire was accidental. The standard CGL policy includes this coverage with a sub-limit (commonly $100,000 or $300,000).

Tip: Check the client's lease agreement for the indemnification language around fire and casualty. If the lease holds the tenant liable for fire damage above a standard amount, the fire legal liability sub-limit may need to be increased accordingly.

Additional Insured / Additional Interest Schedule

What it is asking: The names and addresses of any parties who need to be listed as additional insureds on the policy — typically general contractors, property owners, municipalities, lenders, or management companies.

Why the underwriter needs it: Additional insured endorsements provide third-party liability protection to parties who could be named in a lawsuit related to the insured's operations. They are required by most commercial contracts and leases and must be approved by the carrier before binding.

Common entries: "ABC General Contracting LLC, 456 Industrial Blvd, Houston TX 77001, as Additional Insured per contract"

Tip: Collect the exact legal names and addresses of all required additional insureds before submitting. Certificates of insurance issued with incorrect names are rejected by certificate holders and require corrections that delay project starts and contract execution.

Percentage of Work Subcontracted

What it is asking: What percentage of the insured's total work (by revenue or cost) is performed by subcontractors rather than by the insured's own employees.

Why the underwriter needs it: Subcontractor use is one of the highest-risk factors in GL underwriting for contractors. The insured can be held vicariously liable for injuries caused by uninsured or underinsured subcontractors working on the insured's jobs. High subcontractor ratios (above 50%) trigger enhanced scrutiny and sometimes exclusions or higher rates.

Common entries: "25% of work subcontracted" or "60% subcontracted (electrical, plumbing, HVAC — all licensed and insured)"

Tip: High subcontractor percentages are not automatically disqualifying — carriers want to know that the insured manages sub risk properly. State specifically that you require certificates of insurance from all subs and that subs must carry minimum GL limits matching the insured's own policy. This significantly improves how the underwriter views sub exposure.

Do You Require Certificates of Insurance from Subcontractors?

What it is asking: A yes/no question about whether the insured has a formal practice of collecting certificates of insurance from every subcontractor before they begin work.

Why the underwriter needs it: Collecting certs from subs is a key risk management practice. If a sub injures someone and is uninsured, the claim falls to the general contractor's policy. Carriers view the absence of a certificate collection practice as a significant risk management gap.

Tip: If your client does not currently have a formal practice of collecting sub certs, now is the time to establish one. Create a simple checklist: before any sub starts work, get their COI listing your client as an additional insured. This protects the client and improves their insurability.

Subcontractor Minimum Insurance Requirements

What it is asking: What minimum coverage amounts does the insured require their subcontractors to carry? Some carriers ask this as a narrative; others provide structured fields.

Why the underwriter needs it: If subs are only required to carry $300K GL, that is inadequate protection when the general contractor's own policy carries $1M/$2M limits. The underwriter wants to see sub minimums that are proportional to the overall risk.

Tip: Best practice is to require subs to carry the same limits as the insured — typically $1M occurrence / $2M aggregate minimum. Put these minimums in your written subcontractor agreements and require the cert to reflect them.

Liquor Liability Exposure

What it is asking: Does the business manufacture, sell, distribute, or serve alcoholic beverages? Even hosting company events where alcohol is served can trigger this question.

Why the underwriter needs it: Standard CGL policies exclude liquor liability for businesses "in the business of" selling or serving alcohol. Restaurants, bars, event venues, caterers, and similar businesses need separate liquor liability coverage. The ACORD 126 is where this exposure is identified and disclosed.

Common entries: "Yes — full-service restaurant, beer and wine license only, approximately 20% of revenue from alcohol sales" or "No alcohol service"

Tip: If your client holds a liquor license of any kind, disclose it. Even if they only serve beer at events, they likely need a liquor liability endorsement or a separate liquor liability policy. An undisclosed liquor liability exposure can void GL coverage for alcohol-related claims at the worst possible moment.

Products Liability — Products Sold or Manufactured

What it is asking: Does the business manufacture, sell, import, or distribute any physical products? If so, this section asks for a description of those products and annual product sales revenue.

Why the underwriter needs it: Products liability is a sub-coverage within GL that covers bodily injury or property damage caused by a product the insured made or sold. It is rated separately and may require a products supplement application for higher-risk products (food, medical devices, chemicals, children's products).

Tip: Even retail businesses that do not manufacture products carry products liability exposure — they can be named in a lawsuit if a product they sold injures someone. Make sure the products/completed operations aggregate limit is adequate relative to the volume of product sales.

Employee Benefits Liability

What it is asking: Whether the insured wants coverage for claims arising from errors in administering employee benefit programs — for example, failing to enroll an employee in a health plan they elected, or incorrectly denying a benefit claim.

Why the underwriter needs it: Employee benefits liability (EBL) is typically written as an endorsement to the GL policy and covers the employer's administrative errors in managing benefits programs. It is separate from the benefit plan itself.

Common entries: If the client offers health, dental, vision, 401k, or life insurance to employees, EBL should be offered. Number of employees and number of benefit plans administered are usually required.

Tip: EBL is inexpensive and frequently overlooked. Any business with 5 or more employees and at least one benefit program should carry it. The endorsement premium is typically $200–$800/year — a small price for meaningful protection.

Prior Acts / Retroactive Date

What it is asking: For claims-made GL policies, the retroactive date is the earliest date from which claims can arise and still be covered under the current policy. Prior acts coverage extends protection back before the policy inception date.

Why the underwriter needs it: Most GL policies are occurrence-based, not claims-made. But for some professional liability and certain GL forms, the claims-made trigger is used. The retroactive date prevents coverage gaps when switching carriers or purchasing a new policy.

Tip: For occurrence-based GL policies, this field is generally not applicable. For professional liability, errors and omissions, or claims-made GL policies, the retroactive date should never be moved forward (to a more recent date) without the client's explicit understanding — it eliminates coverage for prior acts and is a significant coverage reduction.