Commercial general liability insurance protects you against various claims related to property damage or bodily injury which may arise against your organization and for which you may be liable to pay. The commercial general liability insurance policy covers an extensive range of liability loss exposure faced by various firms.
Commercial general liability insurance offers extensive cover under various coverages. In case of coverage A of the commercial general liability insurance policy, the insurer offers coverage against losses from the legal liability which arises from bodily injury and property damage of the third party which happens due to your non-professional negligent acts. Here, it is necessary to note that mental injuries and emotional distress are also covered under coverage A of commercial general liability insurance even if there is no physical injury.
However, there are such instances that are not covered under Coverage A of the commercial general liability insurance.
Below are some of the events which are not covered under Coverage A of the commercial general liability insurance policy=
- Asbestos= The general liability insurance policy doesn’t offer coverage in case of losses or damages that may arise due to the actual or alleged use of toxic and other hazardous properties of asbestos.
- Employer’s liability= This insurance policy doesn’t cover bodily injury caused by the insured’s employee if it arises in the course of-
- Employment by the policyholder
- Performing duties with regard to the conduct of the policyholder’s business
Also, in any case, the insurance doesn’t cover bodily injury caused to a spouse, child, parents, siblings, or any such relative of the employee.
- Terrorism= The policy doesn’t cover third-party loss or damage which may arise out of any act of terrorism.
- Aircraft, motor vehicles= The insurance policy doesn’t apply to bodily injury or property damage that arises due to ownership, maintenance, and loading/unloading of- aircraft, motor craft, etc.
- Damages to various third-party properties= In any case, the insurance policy doesn’t apply to third-party property damage if= personal property is loaned or rented to you, property held by you for sale, or entrusted for you to storage.
- Damages to your property= This policy doesn’t apply in case any loss/damage happens to your property.
- Expected or intended bodily injury or third-party property damage= Coverage A doesn’t include bodily injury or property damages that arise due to an act intended by the policyholder.
- War: The policy doesn’t cover any third-party losses or damages which arise due to war, including undeclared war.
Case
J.S Construction has grown its construction business manifolds. Last year, the company got a contract for constructing a warehouse in Pune. The owner of the construction company, Rajesh Singh, started the construction work immediately after signing the deal. There was a plot near the site where the construction work was going on, and that plot belonged to a property dealer, Vikram.
Read more: What is limits of insurance in Commercial Liability Insurance?
As Rajesh required open space to install machinery, keep construction materials and build temporary shelters for workers, he contacted Vikram who gave him a plot on rent. The workers of Rajesh started using the plot for keeping construction materials. They also built their temporary shelters over there.
However, a fire happened at one of the temporary shelters when one of the gas stoves used by workers, got blasted. Though no one was physically hurt, it caused damage to the wall surrounding the plot which Vikram had made to keep stray animals away from the plot.
Here, Vikram approached Rajesh and asked for compensation. Rajesh accepted the fault and agreed to pay compensation. As Rajesh had a commercial general liability insurance policy, it approached the insurer for the claim settlement under Coverage A.
Though the loss happened at a third-party site; the insurer refused to settle the claim. It was argued that the damages happened at a property that was rented to Rajesh and it was his responsibility to ensure the safety of the plot. As a result, the insurer rejected the claim.
