Law360, New York (July 23, 2010, 5:54 PM ET) -- The Texas Supreme Court recently held that the contractual liability exclusion in a Commercial General Liability (“CGL”) policy applies when the only basis for liability is the insured’s contractual agreement to be responsible for determined liabilities. Gilbert Texas Constr. LP v. Underwriters at Lloyd’s London, No. 08-0246, 2010 WL 2219645 (Tex. June 4, 2010).

In Gilbert, the insured, Gilbert Texas Construction LP, contracted with Dallas Area Rapid Transit (“DART’) to serve as general contractor in the construction of a light rail system. Under the contract, Gilbert...