What does the term "malicious prosecution" refer to in CGL policies?

The term "malicious prosecution" in Commercial General Liability (CGL) policies specifically refers to the act of initiating a legal action without a reasonable basis, often with malicious intent. This means that the person filing the lawsuit is doing so not because they have a valid claim, but rather to harass or burden the defendant.

In this context, the correct answer highlights that malicious prosecution refers to the act of filing a baseless legal action. It is important to note that this concept focuses on the misuse of the legal system to pursue claims that lack merit, which can cause significant harm to the person being accused.

When considering the other options: while injury from intentional acts might relate to damaging someone's reputation or premises, it does not specifically encompass the legal ramifications tied to prosecuting someone without grounds. Defaming someone's character speaks to a separate legal issue surrounding false statements and reputational harm, and wrongfully terminating an employee deals with employment law rather than the legal actions taken against someone in civil court. Therefore, filing a baseless legal action aligns most closely with the definition of malicious prosecution.