The Commercial General Liability (CGL) insurance policy is the most common business insurance policy in America. This broad coverage insures businesses against property damage or bodily injury claims that arise out of your actions to others. Although there are a variety of commercial general liability coverage forms, the one you’ll most frequently see is the “Commercial General Liability Coverage Form.” That’s why today we will review this form and explain how most insurance policies are put together.
From slips and falls to certain class-action lawsuits, commercial general liability is a critical component of your business protection. Whether you are looking for high-risk public liability insurance or just a policy to protect your company, there is relevant coverage for every business.
General Liability Insurance
There are many exclusions that may be found in a General Liability Insurance policy. The following is a list of some of the most common exclusions:
- Intentional Acts: Coverage does not apply to bodily injury or property damage that is intentionally caused by the insured.
- Contractual Liability: Coverage does not apply to bodily injury or property damage that is caused by the insured’s breach of contract.
- Product Liability: Coverage does not apply to bodily injury or property damage that is caused by a defect in a product that is manufactured, sold, or distributed by the insured.
- Property Damage to the Insured’s Own Property: Coverage does not apply to property damage to the insured’s own property
- Professional Liability: Coverage does not apply to bodily injury or property damage that is caused by the professional services of the insured.
- Workers’ Compensation: Coverage does not apply to bodily injury or property damage that is covered by workers’ compensation insurance.
- Vehicle Liability: Coverage does not apply to bodily injury or property damage that is caused by the use of a vehicle.
- Pollution: Coverage does not apply to bodily injury or property damage that is caused by pollution.
A commercial general liability (CGL) policy covers two primary things: bodily injury and property damage. Both types of injuries are very broadly defined, so during your initial reading, the policy may seem like it covers everything that could possibly arise. However, the exclusions are what limit the definitions of both bodily injury and property damage. Here’s what you need to know about this important policy and its limitations.
Bodily Injury
Bodily injury refers to physical harm that is caused to a person. This can include injuries such as broken bones, burns, or other forms of physical harm. Bodily injury can also include psychological harm, such as trauma or stress. There are many different types of bodily injury, and the severity of the injury can vary. Some injuries may only require a visit to the doctor, while others may require hospitalization or even surgery. In some cases, the effects of a bodily injury can be permanent, such as paralysis or disfigurement.
Bodily injury can be caused by many different things, including accidents, violence, and exposure to hazardous substances. In some cases, it may be difficult to determine who is responsible for the injury. For example, if you are injured in a car accident, you may need to file a claim with the other driver’s insurance company. If you are injured at work, you may need to file a workers’ compensation claim. There are many different types of insurance that can cover bodily injury. For example, health insurance can help to pay for medical bills, and disability insurance can help to replace lost income. Personal injury protection (PIP) insurance can also help to cover some of the costs associated with bodily injury.
Property Damage
Property damage refers to any physical damage to another person’s property caused by your negligence. For example, if you accidentally start a fire that damages your neighbor’s house, you could be held liable for the resulting property damage. Most general liability insurance policies exclude property damage caused by your intentional acts or willful disregard for safety. They also may exclude damage caused by normal wear and tear or by certain types of hazards, such as floods or earthquakes. If you’re concerned about property damage liability, you may want to purchase a separate insurance policy that specifically covers this type of risk.
Insuring Agreement
The insuring agreement is the section of the insurance policy that sets forth the insurer’s promise to pay for certain covered losses. It is the heart of the contract between the insured and the insurer and sets forth the specific risks that are covered by the policy. The insuring agreement is often referred to as the “coverage grant.”Most insurance policies have an insuring agreement that is written in plain language so that it can be easily understood by the policyholder. However, some insurers use more technical language in their insuring agreements. In either case, it is important to review the insuring agreement carefully to make sure you understand what is and is not covered by your policy. Some insurers use what is known as an “exclusions clause” in their insuring agreement. This clause lists certain types of losses that are not covered by the policy. It is important to review the exclusions clause carefully to make sure you understand what is not covered by your policy.
The insuring agreement is an important part of the insurance contract. It sets forth the specific risks that are covered by the policy and the insurer’s promise to pay for covered losses. It is important to review the insuring agreement carefully to make sure you understand what is and is not covered by your policy.
Why Businesses Need Commercial Liability Insurance
As a business owner, you are responsible for the safety of your employees and customers. You are also responsible for any damage that your business may cause to others. This is why you need commercial liability insurance. Commercial liability insurance will protect you from financial losses if you are sued for damages that you or your business caused. It will also cover your legal expenses if you are sued. There are many different types of commercial liability insurance, so you need to make sure that you have the right coverage for your business. If you are not sure what type of coverage you need, you should talk to an insurance agent. Some businesses are required to have commercial liability insurance, such as businesses that sell products or provide services. Others are not required to have it, but it is still a good idea to have it. No matter what type of business you have, you need to make sure that you are protected from financial losses. Commercial liability insurance will do that for you.
What is excluded under the CGL policy?
Under a typical commercial general liability (CGL) policy, there are a number of exclusions that may apply. These exclusions can vary depending on the insurer, but some of the more common exclusions include:
- Bodily injury or property damage that is intentionally caused by the insured
- Bodily injury or property damage that is caused by the insured’s product or work
- Bodily injury or property damage that occurs on the insured’s premises
- Bodily injury or property damage that is caused by the insured’s professional services
- Bodily injury or property damage that is caused by pollution
- Bodily injury or property damage that is caused by war or terrorism
It’s important to read the fine print of your CGL policy to make sure you understand what is and is not covered. If you have any questions, you should always consult with your insurance agent or broker.
The Bottom Line
As a business owner, it’s important to understand what your general liability insurance policy does and does not cover. Exclusions to your policy could leave you financially vulnerable if your business is sued or held liable for damages. Some common exclusions to general liability insurance policies include:
- Professional liability: This exclusion applies to businesses that provide professional services, such as lawyers, accountants, and consultants. If your business is sued for negligence or malpractice, your general liability policy will not cover the costs.
- Product liability: This exclusion applies to businesses that manufacture, sell, or distribute products. If your business is sued because a product you sold caused injury or damage, your general liability policy will not cover the costs.
- Workers’ compensation: This exclusion applies to businesses that have employees. If an employee is injured on the job, your general liability policy will not cover the costs of their medical treatment or lost wages.
- Business interruption: This exclusion applies to businesses that rely on income from operations. If your business is forced to close due to damages from a covered event, your general liability policy will not cover the lost income.
While exclusions vary by policy, these are some of the most common. Be sure to read your policy carefully and talk to your insurance agent to make sure you understand what is and is not covered.
General liability insurance is a common necessity for most businesses. We can help you to determine a policy that works for your unique business.
