commerCial general liAbiLity

What is Commercial General Liability Insurance?

Your business is protected from financial loss by a Commercial General Liability policy (CGL). It covers you against any personal or advertising injuries, property damage, or personal injury that may be caused by your business operations or employees. It also covers negligent acts that are not professionalnegligent. This coverage is an important step towards managing CGL risk.

These are just a few of the situations where your business may be responsible for paying certain costs such as legal and medical expenses as well as compensatory or punitive damages.

• A customer falls on loose flooring while visiting your business and gets hurt.
• Your painting or construction company employee accidentally lets water run, causing significant damage to the home of a customer.
• Your business is the subject of a class action lawsuit. The suit alleges that your advertisements contain misleading information.

Commercial General liability

What Does Commercial Liability Insurance Cover?

CGL insurance policies will typically cover your legal defense costs and pay for any damages you suffer if you are found guilty. This is up to the policy limits. CGL coverage is essential because of the potential negative effects that a lawsuit could have on a company and the frequency with which such liability suits occur. The standard CGL coverage includes:

Insurance coverage A: Property damage and bodily injury

Bodily injury/property damage coverage protects against legal liability for insureds in case of bodily injury or property loss caused by nonprofessional negligence or by their premises or business operations. Even if there is no physical injury, mental injuries and emotional distress are considered bodily injuries.

Workers compensation and employment practices insurance are exclusions, but they can be purchased separately. An endorsement can also be purchased for pollution liability. This coverage is limited and high-risk companies should consider buying a separate policy to protect themselves against pollution. Other risks, such as professional liability, liquor liability, and professional liability may be excluded. A professional insurance agent can help you determine the right endorsements for your business.

Coverage B: Advertising and Personal Injury

The insured is protected against personal and advertising injury liability for certain offenses such as:

• Libel
• Slander
• False arrest
• Copyright infringement
• Malicious prosecution
• Advertising idea borrowed from another source
• Invasion of privacy, unlawful entry or eviction

Coverage C: Medical Payments

The coverage of medical payments is limited to injuries suffered by non-employees as a result of an accident on the insured’s premises, or exposure to insured’s business operations. Without requiring legal action, medical payments coverage is possible. This allows for quick settlement of small medical claims without the need to go to court. This coverage is part of the CGL policy. It covers all reasonable and necessary medical, surgical, hospital, professional nursing, and funeral expenses for any person who has been injured or killed as a result of an accident that occurred at the insured’s premises. It does not provide legal liability or defense coverage, as there is for bodily injury and property (Coverage A), and personal and advertising (Coverage C). This coverage is on a no fault basis.

Commercial general liability

Purchasing Commercial General Liability Insurance

Commercial general liability insurance can be purchased as a standalone policy, part of a Business Owners Policy or a Commercial Package Policy. Talk to your insurance agent about the type and amount of coverage that you require. You may consider buying a commercial excess (umbrella), which will give you additional protection if your general liability, BOP, or CPP policies do not provide enough coverage.

Commercial General liability

Additional Liability Coverages to Consider 

You may need additional liability coverage depending on the type of business you have. Discuss the coverages you might need with your legal counsel, risk manager, and insurance professional. These are just a few of the key types insurance you should consider.

Liability for officers and directors

Directors and officers insurance covers past, present, and future directors and executives of nonprofit and for-profit companies against damages resulting from wrongful acts or alleged wrongful acts. This policy protects against any actual or alleged error or misstatement, omission or misleading statement, or breach of duty. Some policies also extend the same coverage for employees.

Liquor liability

Liquor liability insurance protects your business from any claims or losses arising from patrons of your business getting intoxicated or injuring themselves or others. This coverage is required if your business sells, serves, or facilitates the purchase or use of alcohol. You can either add liquor liability coverage to your commercial liability policy, or you can purchase it as a standalone policy. However, this coverage is not included in your standard commercial general liability insurance . This policy does not protect your business from liquor-related claims.

Pollution liability

This coverage offers protection to industrial, commercial, and agricultural property owners, managers, and developers. It covers pollution liability protection for both first-party and second-party environmental liabilities. This coverage protects assets against unforeseen environmental exposures that may have a significant impact on earnings. It protects assets from unanticipated pollution hazards that could lead to property damage, bodily injury, or increased costs for clean-up.