Commercial General Liability

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Q1. What is Commercial General Liability (CGL) and why, as a business owner, you need it?
Commercial general liability insurance, or CGL, is coverage that will protect your business in the event that you are sued by a third party for bodily injury and property damage. It is often used to cover claims against your business for injury or property damage. Typical examples include if a customer is injured at your place of business, or say an employee damages property at a client’s site.
Without a commercial general liability insurance policy, you are leaving yourself and your company vulnerable to lawsuits that could have a devastating impact on your business. It is, unfortunately, a necessary cost of doing business because the likelihood of being sued is more common than you might think. It is for this reason that commercial general liability insurance is one of the most popular business insurance products sought after by business owners.
Q2. What is covered under Commercial General Liability?
A. Bodily Injury and Property Damage Liability
Basically, if your company, your product, your work, your employees, or anything else associated with your company causes physical injury to someone like a client, or damages their property or belongings, you could be held legally responsible. If held legally responsible you may be required to pay. It is in cases like these that your coverage will pay for the compensatory damages.
What’s not included?
Punitive damages (where you’re ordered to pay money as a form of punishment)
Intentional injuries or damage (to a person or their property)
Injuries or damage from the use of your commercial automobile
Injuries to employees or damage to their property
Damage to property you own, rent or occupy.
B. Personal Injury Liability
In a CGL policy Personal Injury means damage of a person’s character, reputation and position in the community as a result of libel (in print) or slander (verbal defamation.).
What’s not included?
Typical situations not covered include statements known to be untrue when said, as well as damage caused by offences that are illegal or go against ordinances or by-laws.
C. Medical Payments
This part of your CGL policy is interesting, as its purpose is to provide coverage that pays someone’s minor medical expenses from an accident that happens at your company’s premises or as a result of your company’s operations-even though you may never be held legally liable for the accident. In fact, it’s often used as a way to avoid a costly lawsuit.
What’s not included?
This coverage typically excludes everyone that’s also “excluded” from coverage under the Bodily Injury & Property Damage, as well as casual workers and tenants who injure themselves in their own unit.
D. Tenants’ Legal Liability (for those who rent or lease their workspace)
Suppose you do not own the space where you have set up shop and rent your office, shop or retail space. If you are held legally responsible for causing a fire, explosion, smoke damage, or other damage caused by fire protection (like sprinklers going off) then this coverage will pay the compensatory damages. This applies only to damages of the rented premises – not the property (i.e. product, inventory etc.) that you may personally own.
What’s not included?
Intentionally trying to destroy property is not covered.
Q3.What is not covered under Commercial General Liability insurance?
Every business insurance policy for commercial general liability coverage has risks, events or “occurrences” that are not covered. That’s not to say that coverage is not available, just that the following are highly specialized “risks” that require more than a standard, typical policy like a CGL:
1. Injury or property damage resulting from pollution caused by your company’s operations, activities, employees or product.
2. Injury or property damage resulting from the use of nuclear material
3. Injury or property damage resulting from war
4. Professional liability (often referred to Error and Omissions insurance)
5. The misuse, destruction or distribution of data
6. Acts of terrorism
7. Injury or property damage resulting from fungi
8. Injury or property damage resulting from asbestos
Q4.What are the extension under Commercial General Liability insurance?
1. Medical Expenses Coverage.
2. Damage to rented premises
3. Sudden & Accidental Pollution Liability
4. Coverage for additional insured when required by written contracts.
5. Advertising Injury and Personal Injury Liability Coverage.
6. Vendor’s Endorsement.
7. Oral and written contractual Liability: bodily Injury/Property damage.
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