Commercial General Liability Insurance (CGL) As First Line Of Defense
Commercial general liability insurance was created to cover a wide range of business related liability insurance needs. This type of insurance is much like a comprehensive liability insurance package and is able to protect your organization from a number of potential problems. The loss exposure to your corporation is ever growing, finding the right package to meet your unique and specific needs is essential to success of your future business.
What Is Commercial General Liability Insurance?
Commercial general liability insurance is frequently referred to as CGL insurance. It is often the first line of defense an organization has against loss exposure. It is designed to cover a wide assortment of loss exposures that can face a corporation, including but not limited to products, premises, business operations, competed operations, contractual, and contingent liability.
Despite its all encompassing attributes, there are a number of business liability arenas that it does not cover. Knowing where the holes in coverage are is essential to completing your comprehensive business liability protection plan. Some key areas in which coverage is not provided through the commercial general liability insurance policy are liabilities arising from professional services rendered (or not rendered), liability for injury to employees (which is covered by employers liability insurance), or liability arising from commercial vehicles.
What Does Commercial General Liability Insurance Cover?
Commercial general liability insurance policies are designed to cover a wide range of liability risk. Included but not limited to…
- Business Operations Liability – Business may face liability for bodily injury, personal injury, or property damage resulting from the actions of a business owner or employee of the company. Where these activities take place is usually irrelevant.
- Completed Operations Liability – This is liability that comes as a result of work that was completed incorrectly or damage caused by finished work done by your company.
- Contractual Liability – Contractual contracts, both oral and written, can result in liability to the company.
- Contingent Liability – Contingent liability can result from the work of a subcontractor or independent contractor for your company that results in liability for your organization.
- Premises Liability – Injuries, damages, or death as a result of something happening on your premises can result in premises liability for the owner or tenant of the location.
- Products Liability – Property damage or injury that results from a faulty or defective product can cause products liability exposure for the company.
GCL coverage forms generally have three categories:
Coverage A – Bodily Injury and Property Damage Liability. This section of coverage refers to the legal liability and defense cost of commercial general liability insurance that arises as a result of property damage and personal injury.
Exclusions: There are a number of common exclusions from this portion of the GCL form. Anything that is covered in Coverage B or C is automatically excluded from Coverage A (it’s technically not excluded as it was never included). Other broad exclusions include anything already covered in officers and directors insurance, professional indemnity insurance, or workers compensation and employers liability insurance.
Other Significant Exclusions:
- Bodily injury or damage that is expected.
- Contractual assumptions of liability such as covered by errors and omissions insurance.
- Liquor liability.
- Pollution.
- Certain classes of property are excluded from property damage coverage.
- Product protection of the insured (replacement of product that caused the damage).
- Damage to impaired property or property not physically damaged.
- Product Recall.
- Employment related practices.
- Professional liability.
- Damage from the loss of electronic data.
Coverage B – Personal and Advertising Injury Liability. This provides protection for personal injury liability as well as advertising liability coverage. Advertising injury can be defined as material that slanders or libels a person or organization, violates a person’s privacy, steals another’s advertising, or infringes on copyright, trade dress or slogans.
Exclusions: Exclusions include material that the insured knows is false, wrongful descriptions of products, failure of products to meet quality specified in advertising, and willful violations of penal statues or ordinances.
Coverage C – Medical Payments. Similar to homeowners insurance, Coverage C provides medical payment coverage to individuals injured on the premises of business of the organization.
Exclusions: Coverage C does not cover the following persons for medical payments.
- Insured workers other than volunteers
- Those hired to do work on the premises
- Individuals injured in the part of the premises in which they typically occupy
- Injuries as a result of athletics
- Any already entitled to workers compensation
How Do You Get A Good Commercial General Liability Insurance Quote?
The cost of commercial general liability insurance can vary greatly between organizations. Factors such as the size of your company, the number of employees, the histories of the directors and officers, the industry you do business in, the nature of your products, your locations, and a number of other things will determine your own individual commercial general liability insurance cost.
The best way to get good commercial general liability insurance quotes is to do the leg work and get quotes from a number of different sources. Once you have compiled the initial and basic information needed for the quote, you can replicate your results across a number of different companies. Either work with a couple of different agents that represent strong liability insurance companies, or find a good commercial general liability insurance broker that can get your multiple quotes.
Insurance companies will vary features, pricing and availability. Getting a quote that fits your particular needs is usually just a matter of sending out your line and seeing what you can reel back in. Take the time to find the policy that will provide your company with the first line of defense that it needs.
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