Commercial General Liability Insurance


Commercial General Liability Insurance

A Commercial General Liability insurance policy is one of the most important policies to be considered for all businesses. There are potential threats of an accident to a customer, vendor, or any third-party involved with your business. Even a simple slip and fall in the premises can be devastating resulting in a potential lawsuit.

The Commercial General Liability Insurance policy will provide necessary financial support to businesses against any legal liabilities due to a bodily injury or property damage that can oc-cur as a result of your business operations.

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Coverage

Commercial General Liability insurance is a combination policy covering both public and product liabilities under one single policy form.

  • Covers for legal liability to pay damages because of bodily injury or property damages with no limitations for cover in terms of premises- owned/rented or at premises/out-of premises.
  • Coverage includes all bodily injury and property damage arising out of products of the businesses. Product Liability Insurance will cover for cost of compensation against financial losses suffered by a third-party arising out of use or consumption of a faulty product. The third-party has to suffer a bodily injury or property damage.
  • Any damages because of personal and advertising injury caused by an offence arising out of business.

Critical Features of the CGL policy

Third-Party Injury Protection May Cover

  • Non-employee injuries that happen on your property.
  • Immediate medical expenses for the injured person.
  • Legal costs when you're sued over the incident.
  • Lawyers' fees
  • Court expenses
  • Settlements, and judgments, if the case goes to trial and you're found liable for wrong-doing
  • Repair costs for damaged property
  • Replacements for lost or destroyed property

Product Liability Protection May Cover

  • Damage caused by the products you make, distribute, or sell.
  • Legal costs when you're sued over the incident.

Advertising Injury Protection May Cover

  • Invasion of privacy, such as using someone's image or words without their consent.
  • Libel or slander.
  • Copyright or trademark infringement.
  • Legal costs when you're sued over these incidents.

Definitions

Bodily injury: Includes death and illness, disability, shock, anguish or mental injury.
Property damage: Any destruction of tangible product including loss of use.

Who can buy the Commercial General Liability insurance?

  • Small businesses
  • Contractor
  • Manufacturers
  • Distributors
  • Wholesalers and retailers

The product that is insured can be the final product or just a part of the final product. Hence, all businesses involved in either manufacturing or distribution of a tangible product should consider buying this insurance policy.

What is paid under Commercial General Liability insurance?

Commercial General Liability insurance provides cover for payments, medical expenses and damages including:

  • Legal liability expenses including claimant’s costs, fees and Defense costs.
  • Damage costs — monetary sums pursuant to judgments or awards and settlements.

All the above expenses and costs are paid for third-party claims arising out of bodily injury or property damage.

What is NOT paid under this insurance?

  • Any liability for fines, penalties or punitive damages.
  • Product Guarantee.
  • Recall of any product (unless purchased as an extension).
  • Repair or modification or replacement of product or any part of the product.
  • Wilful, deliberate non-compliance with any statutory provisions.
  • Copyrights, patents or trademarks infringement.
  • Radioactive toxic explosives or other hazardous materials.
  • Claim made prior to policy inception or retroactive date (if any).
  • War risk and Terrorism.

How the limits under Commercial General Liability insurance work?

  • Coverage will be restricted by policy terms and conditions, and limited within a certain maximum limit of coverage per event or occurrence (AOA)
  • The limit varies depending on the company's revenues, business, and exposure type.
  • The policy limit is an "annual aggregate" (AOY) meaning that there is only one single limit for all the claims during one policy year.
  • Defense and other costs are part of this single limit

FAQ's

  • What is commercial general liability insurance?
    Commercial general liability is a type of liability insurance that provides coverage to your business against legal liabilities arising out of bodily injury or property damage that happened as a result of your business operations. As the name suggests, CGL policy covers general business risks.
  • What is covered under commercial general liability insurance?

    Commercial general liability coverage takes care of a wide range of risk exposures. CGL policy covers any bodily injury, property damage, advertising and personal injury that is caused as a result of direct business operations.

    For instance, if a customer comes to your establishment and falls due to a slippery floor, they can make legal claims for that. Similarly, if one of your servicemen visits a customer's house, drops heavy equipment, and damages the flooring, that customer can file a lawsuit for that. There are many such examples that would require general liability insurance coverage.

  • What is not covered under commercial general liability insurance?

    There are several things that don't come under commercial general liability insurance coverage. It includes contractual liability, deliberate injury, professional liability, pollution, employee disputes, and more. Before you get CGL coverage, it's essential that you understand everything about the policy and are well aware of its exclusions.

  • Does commercial general liability insurance cover product liability?

    In comprehensive commercial general insurance policies, product liability is covered. Commercial general liability insurance is basically a combination of public and product liabilities under one policy. However, you can purchase a separate product liability insurance based on your needs. Consult a licensed insurance broker for more information.

  • Does commercial general liability insurance cover errors and omissions?

    No, general business liability insurance doesn't cover errors and omissions. You will have to buy a separate E&O policy to get coverage for errors and omissions.

  • Is commercial general liability the same as a public liability?

    No, commercial general liability insurance and public liability insurance are two different policies.

    However, a comprehensive commercial general liability insurance will cover public liabilities as well. Talk to your insurance broker for more information.

  • How much does CGL insurance policy cost?

    There’s no defined figure for this. For different businesses, the cost of CGL insurance policy would be different. It depends on various factors, including their coverage requirements, risk exposures, and which insurance company they are buying the policy from. Connect with us for a free commercial insurance policy quote.

  • How to buy commercial general liability insurance?

    It starts by first determining your CGL insurance coverage requirement. Once you know the kind of coverage you need, time to find a fitting plan. The whole buying process, which includes doing research and customizing the CGL plan if needed, can be a bit challenging for business owners. So, it’s usually recommended to get help from licensed insurance brokers.

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