Commercial General Liability Insurance

Commercial General Liability Insurance is commercial insurance coverage that is designed to mitigate financial risks to your company. Financial risks can arise from lawsuits and litigation against your business for a number of potential hazards. Commercial general liability insurance, or CGL, pays for damages and claims that come about primarily due to bodily injuries and property damages. Effectively, it keeps your company from going bankrupt due to legal defense bills if a customer sues you.

Commercial General liability insurance protects you from the most common types of lawsuits that can arise from customers or other hazardous events. It’s the most popular type of commercial insurance coverage because it covers all of the most likely events you may encounter.? While your business insurance policy can vary, general liability coverage normally focuses on four specific areas of protection:

Bodily Injury

General liability provides your company with legal and financial protection if a customer is ever subjected to bodily injuries at or because of your business. Bodily injuries can include physical injuries such as when a customer slips on a newly waxed floor. It can also include sickness or disease that is attributed to your company, and mental anguish or suffering.

Effectively, anyone or anything that is associated with your company can cause bodily harm to a client or customer. Your office or retail space, your employees, the work you provide and the products you sell. When a customer receives physical harm or damage, your company may be legally liable to pay for those damages.

Property Damage

Commercial general liability provides your business with legal and financial protection if your company is responsible for damages caused to someone else’s property. For example, if one of your employees accidentally punctures a gas pipe while installing a swimming pool and it causes a fire on the customer’s property, your company may be legally liable for those damages. General liability provides protection for property damages that happen on your business premises as well.

Products And Completed Operations

Products and Completed Operations coverage is a pivotal facet of general liability insurance, particularly salient for businesses that manufacture, distribute, or sell products, or those that provide services which could result in bodily injury or property damage away from the business premises. Essentially, this coverage safeguards businesses from claims arising out of injuries or damages caused by the products they produce or the services they render.

For instance, if a consumer is harmed by a defective product or if a construction job is faulty and leads to damage later on, this segment of the policy would respond to such claims. However, it's important to note that the coverage is only triggered once the product has left the business's premises or after the operation or service is completed.

Personal And Advertising Injury

Personal and Advertising Injury insurance provides businesses with essential protection against non-physical injuries caused to others and certain offenses committed during advertising activities. Coverage may include offenses like libel, slander, invasion of privacy, copyright infringement and misappropriation of advertising ideas. If a company's promotional campaign accidentally defames a competitor or uses copyrighted material without authorization, its Personal and Advertising Injury coverage would step in to help cover claims that resulted.

Unlike bodily injury or property damage policies, this coverage takes into account more subtle forms of harm businesses face in today's media-centric and reputation-minded society.

Medical Payments

Medical Payments Coverage, often included as part of general liability policies, reimburses immediate medical costs resulting from injuries on company premises or as the result of company operations without regard for fault. This coverage pays medical costs regardless of negligence. Business insurance provides businesses with a means of showing goodwill and quickly responding to minor injuries without admitting liability, while potentially minimizing larger claims or suits that might otherwise ensue. If a customer falls and needs medical care inside a shop, Medical Payments coverage may provide coverage up to an agreed-upon limit of their medical expenses. Businesses should note that while Medical Payments coverage covers direct medical costs, it does not cover liability claims related to pain and suffering or other long-term effects associated with an injury.

Damage To Premises You Rented To You

When you rent or lease your business space, accidents can arise that you are found legally liable for. If for example, your employees overload an electrical socket and cause a fire, your company would have to pay the damages to the building. If your company causes other damages such as smoke damage, water damage due to setting off the sprinkler system accidentally, explosions or other otherwise, tenant’s legal liability can pay for the damages that occurred.

Tenants’ liability coverage may be required by the building owner before your company is allowed to rent or lease the space. The policy does not cover any damages or destruction that is found to be intentional. It also does not cover your personal or business assets such as furnishings or inventory. It simply pays for damages to the building if you are found to be at fault for those damages.

General Liability Exclusions

Your commercial general liability insurance policy will list specific events and incidents that it will not cover. These exclusions are generally based on the level of risk involved, and as high risk incidents they require different or additional coverage levels. Examples include:

Pollution If your company is found liable for property damages or bodily injuries that were caused by pollution. Pollution may be caused by your employees, your products, or your company’s operations and activities.
Nuclear Material General liability normally excludes coverage for injuries or damages caused by using nuclear materials.
War Bodily injuries and property damages that result from war are generally excluded.
Professional Liability Errors and Omissions by licensed professionals such as physicians or accountants.
Data Liability If data is misused, distributed or destroyed, general liability normally does not protect your company from these events.
Terrorism, Fungus or Asbestos Property damages and bodily injury caused by these items is normally excluded from commercial general liability insurance policies.
Punitive Damages
Intentional injuries or property damage
Commercial automobile injuries and damage
Injuries to employees
Damages to employee property
Damage to property you own