Commercial General Liability Insurance

In today's lawsuit-happy society, litigation can wreak havoc with any business — including yours. Commercial General Liability (CGL) insurance helps protect your assets by providing a first line of defense against a variety of claims for alleged negligence or wrongdoing. By covering the cost of defending or settling these claims, a CGL policy can help you keep your business in business.

Coverages

Liability: CGL covers six basic categories of business liability:

• Bodily Injury: physical harm to a person at your place of business, or an injury caused by your employee at a client's site.
• Completed Operations/Products Liability: losses after your business has completed work for a customer (such as repairing appliances or installing plumbing), or from manufacturing and distributing products.
• Personal Injury: damage to the reputation or rights of a person or business due to slander, libel, copyright infringement, invasion or privacy, false arrest, wrongful eviction, etc.
• Advertising Injury: losses caused by your advertising (spoken or written); for example, an ad that trashes a competitor.
• Independent Contractors Liability: damage from the acts of an independent contractor hired by your business.
• Medical Payments: Pays the medical expenses of a person injured on your premises (a customer, client, visitor, or even a trespasser) up to a stated amount, regardless of fault — as a goodwill gesture to prevent lawsuits.

Damages Covered

Your general liability insurance will pay three types of damages:

• Compensatory damages: financial losses of the claimant, plus additional monetary losses resulting from the claim.
• General damages: for intangible losses ("pain and suffering.” “mental anguish,” etc.)
• Punitive damages: penalties against your business for committing a wrongful act.

Exclusions

Although CGL insurance provides a wide range of protection for your business, it won't pay liability claims related to these areas (which you can cover with other policies):

• On-the-job injuries to employees (Workers Compensation);
• Operating autos or trucks in your business (Business Auto Policy);
• Performing, or failing to perform, professional services (Professional Liability/Errors & Omissions);
• Acts as a corporate director or officer (Directors & Officers Policy);
• Pollution (Environmental Liability);
• Damage to property of others in the care, custody and control of your business — for example, an electronic repair shop storing customers' televisions (Baillee's Customer Floater); and
• Products, such as food items or toys, subject to recall.

Commercial general liability insurance also excludes coverage for losses related to war, terrorism, or nuclear events.

The Bottom Line

A well-crafted Commercial General Liability policy can help give you financial peace of mind, freeing you up to grow your business.