Commercial General Liability (CGL) insurance is the most important coverage for insuring commercial liability losses. CGL insurance covers your premises, operations, products, and completed operations. It will respond when your business is sued and will cover your legal expenses, court-awarded damages, and out-of-court settlements. CGL insurance is also referred to as general liability insurance or simply, liability insurance.

Why is Commercial General Liability insurance so important?

A lawsuit can be devastating to your business and your livelihood. If you are named in a lawsuit, you will have to pay for your legal costs. It could take years before the lawsuit is settled. A lawsuit will take the focus off your business and be very stressful to you, your partners, employees, and your family. A general liability insurance policy will give you peace of mind.

4 Key Areas of Coverage of CGL Insurance

The CGL policy protects you in 4 key areas.

Coverage A – Bodily Injury and Property Damage Liability
Coverage B – Personal Injury Liability
Coverage C – Medical Payments
Coverage D – Tenants Legal Liability

Bodily Injury and Property Damage Liability

You or your business may be legally obligated to pay for bodily injury or property damage to a third party if they suffer an injury or property damage from your operations, products, or on your premises.

Personal Injury Liability

Personal injury sounds like physical harm which is covered above, but it is damage to a person’s reputation or character. It can also include false arrest, detention or confinement against one’s will.

Medical Payments

If someone is injured on your property as a result of your operations, you may feel a moral obligation to cover the injured parties’ reasonable medical expenses. This may help you to avoid a costly and drawn-out lawsuit. Reasonable medical expenses can include surgery, x-rays, ambulance and hospital expenses, and other medical services.

Tenants Legal Liability

Tenants Legal Liability covers your rented premises such as your office or retail space. It protects you against liability for damages such as fire or water damage and will compensate the property owner (i.e. landlord) for damages. Property that you own (buildings, inventory, computers, furniture) is not covered under the liability policy. This can be covered separately on a property policy.

Commercial General Liability Insurance Claims Examples

Here are some examples of the types of losses that would be covered under a CGL policy.

• A customer slips and falls on your premises after the floors were mopped and breaks a leg.
• You are a roofing contractor and, due to improper work, your customer’s roof leaks over several months causing water damage.
• A customer suffers food poisoning at your restaurant.
• Your product is considered to be defective after it causes illness or injury.
• Your business is sued for libel and slander.
• One of your snowplow operators damages a car.
• A customer must be forcibly removed from your premises.
• One of your employees working in a client’s home accidentally breaks an item of value.

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