Commercial General Liability Insurance covers property damage, third party injuries and advertising injuries. The policy will cover damages caused by your services, business operations, or employees. General Liability covers non-professional negligent acts (professional negligent acts are covered by Professional Liability).
Here are a few examples of situations in which your General Liability insurance would kick in to cover costs like medical and legal expenses, as well as compensatory and punitive damages:
- While visiting your business, a customer trips on loose flooring and is injured.
- An employee in your painting or construction business accidentally leaves water running, causing substantial damage to a customer’s home.
- A class action lawsuit is filed against your business, alleging advertisements constituted misleading information.
- You drop an iPad at your client’s office
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What Does Commercial General Liability Insurance Cover?
A CGL insurance policy will usually cover the costs of your legal defense, and will pay all damages if you’re found liable (up to the limits of your policy). General Liability coverage is one of the most important insurance products, because the accidents it covers happen quite frequently, and often lead to lawsuits.
Coverage A: Bodily Injury and Property Damage Liability
Bodily Injury and Property Damage coverage provides protection against harm/damage to people and property during the course of business operations, or on the premise of your business. Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.
Workers compensation and employment practices liability insurance are excluded but can be purchased as separate policies. In addition, pollution liability is excluded and can be purchased as an endorsement. However, this coverage is very limited, and high-risk businesses should consider purchasing a separate pollution liability policy. Liquor liability, professional liability and other risks may also be excluded. Reach out to Bunker’s insurance advisors to help determine which endorsements are right for your business.
Coverage B: Personal and Advertising Injury
Personal and advertising injury liability protects against liability arising out of offenses such as:
- False arrest
- Infringing on another’s copyright
- Malicious prosecution
- Use of another’s advertising idea
- Wrongful eviction, entry or invasion of privacy
Coverage C: Medical Payments
Limited coverage for medical payments includes payments for injuries sustained by a non-employee caused by an accident that takes place on the insured’s premises or because of the insured’s business operations. Medical payments coverage can be triggered without legal action. This provides for prompt settlement of smaller medical claims without litigation. It is included in the CGL policy and pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations. There is no defense or legal liability coverage—as there is with bodily injury and property damage (Coverage A) and personal and advertising liability (Coverage B) —since coverage is provided on a no-fault basis.
Purchasing General Liability
You can purchase commercial general liability insurance as a stand-alone policy, as part of a Business Owners Policy (BOP) or as part of a Commercial Package Policy (CPP). If your general liability policy, BOP or CPP do not provide sufficient coverage, you may want to consider purchasing a commercial excess (umbrella) policy, which will provide additional protection.
If you’d like help building the perfect policy for your business, Bunker’s advisors are always available to chat! Give us a call at (877) 968-9108, or email firstname.lastname@example.org! If you have a dedicated Account Manager, please email directly.