Commercial General Liability (CGL)

A Commercial General Liability (CGL) policy is a type of insurance that provides coverage for businesses against liability claims for bodily injury, property damage, and personal and advertising injury. This type of insurance is designed to protect businesses from financial losses arising out of legal actions brought against them by third parties.

Here are key components and coverages typically found in a Commercial General Liability policy:

  • Bodily Injury and Property Damage Liability:
    • Bodily Injury (BI): Covers medical expenses, loss of income, and other expenses associated with injuries to other people caused by the business's operations, products, or premises.
    • Property Damage (PD): Covers damage to someone else's property caused by the business's operations, products, or premises.
  • Personal and Advertising Injury:
    • Covers non-physical injuries such as libel, slander, defamation, and infringement of copyright or trademark. This coverage helps protect against lawsuits arising from the business's advertising and promotional activities.
  • Medical Payments:
    • Pays for medical expenses incurred by third parties who are injured on the business's premises or as a result of its operations, regardless of fault.
  • Products and Completed Operations:
    • Provides coverage for liability arising from products the business manufactures, sells, handles, or distributes, as well as completed operations (services that have been completed).
  • Defense Costs:
    • Covers the cost of defending the insured against lawsuits, including legal fees, court costs, and settlements or judgments.
  • Limits and Deductibles:
    • Policies typically have limits on the amount of coverage provided for each occurrence and an aggregate limit for the policy period. Deductibles may also apply, requiring the insured to contribute a certain amount before the insurance coverage kicks in.

It's important to note that a Commercial General Liability policy usually doesn't cover every risk a business may face. Businesses may need additional policies or endorsements to address specific risks, such as professional liability, employment practices liability, or cyber liability.

Before purchasing a CGL policy, businesses should carefully review and understand the terms, conditions, and exclusions in the policy. Additionally, it's advisable to work with an insurance professional to tailor coverage to the specific needs of the business.

Photo by Antoni Shkraba: