What is Commercial General Liability Insurance?
A Commercial General Liability (CGL) policy protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts. Understanding this coverage is an important first step in managing CGL risks.
Here are just a few examples of situations in which your business could be responsible for paying various costs, such as 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.
Commercial General Liability Insurance is almost always required in contracts, and often one of the first coverages purchased by a new business. It is almost always required by landlords when signing a lease, or by clients when engaging in a new contract.
What does Commercial General Liability Insurance cover?
A CGL insurance policy will usually cover the costs of your legal defense and will pay on your behalf all damages if you are found liable—up to the limits of your policy. CGL coverage is one of the most important insurance products, due to the negative impact that a lawsuit can have on a business and because such liability suits happen so frequently. Standard CGL includes the following three types of coverage:
Coverage A: Bodily Injury and Property Damage Liability
Bodily injury and property damage coverage provides protection against losses from the legal liability of insureds for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations. Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.
Coverage B: Personal and Advertising Injury
Personal and advertising injury liability protects an insured against liability arising out of certain offenses, such as:
- False arrest
- Infringing on another’s copyright
- Malicious prosecution
- Use of someone else'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 when exposed to 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.
How do I purchase Commercial General Liability Insurance?
You can purchase Commercial General Liability Insurance through Bunker by clicking here. Review your insurance requirements to determine what type of coverage you need and how much.
If your General Liability policy does not provide sufficient coverage, you may want to consider purchasing a Commercial Excess (umbrella), Workers Compensation, Employment Practices, or Professional Liability policy which will provide additional protection.