Commercial General Liability Insurance (often abbreviated to CGL or GL) provides protection against bodily injury and property damage claims for which a business becomes legally liable. Since commercial general liability insurance is the foundation of overall liability insurance for a business, it is important to have a good understanding of what risks CGL/GL covers.
To build the best overall insurance package for your company, we highly recommend you seek the advice and counsel of an insurance professional with experience in handling the insurance needs of businesses.
Who/What is Covered?
The term “named insured” in a commercial general liability insurance policy refers to the policy holder listed on the declarations page. Determining the legal designation of the “named insured” listed on the declarations page of the policy helps to define who will be covered under the policy.
- If the “named insured” operates as an individual, he or she is covered by the policy while acting in a legal capacity for the business.
- If the “named insured” operates as a joint venture or partnership, coverage extends to members and partners of either while they are acting in a legal capacity for the business.
- In the event the “named insured” operates as a limited liability company, the company along with its members and managers are covered while they are acting in a legal capacity for the business.
- Finally, if the “named insured” operates as a corporation or association, the organization itself along with its executive officers and directors are covered by the policy while they are acting in a legal capacity for the business.
Examples of Coverages
Commercial general liability insurance coverage applies to claims where the insured is legally liable. However, the coverage does not apply to all situations where the insured is legally liable for damages. Coverage is limited to those obligations listed in the insuring agreement of the policy and not otherwise excluded from the policy.
In the event that an insured is legal liable for “bodily injury” – including pain and suffering, sickness or disease, or death – the bodily injury portion of the commercial general liability insurance policy offers protection.
This coverage applies when physical injury occurs to tangible property, including loss of use, or where loss of use occurs on property that is not physically damaged. For example if, while performing a service for a client, you knock a valuable vase off a shelf, then you may be liable for the cost of the value of the vase.
Products and Completed Operations
Products and completed operations coverage extends to those bodily injury and property damage claims which are a result of damages caused by the “named insureds” products or completed operations.
Personal and Advertising Injury
Personal and advertising injury protects the “named insured” for injuries which he or she are legally liable, due to an occurrence listed in the “Personal and Advertising Injury” definitions of the policy. These include but are not limited to: malicious prosecution, false arrest, detention or imprisonment, oral or written publication of material which libels or slanders a person or organization, or copyright infringement.
Damage to Premises Rented to You
Subject to policy limits, this coverage protects the insured in the event of a claim for damage resulting from causes other than fire in or on premises which they have rented.
Fire Legal Liability
This coverage offers protection when the “named insured” becomes liable for fire damage to the premises which he or she is renting or, with the owner’s consent, temporarily occupying.
Again, commercial general liability insurance does not apply to all situations where a “named insured” is legally liable and is subject to the policies exclusions. Commercial general liability insurance is different from errors and omissions (E&O) insurance, so to be certain you have the right coverage for the risks represented by your business, you need to consult with an experienced insurance professional.