Commercial general liability insurance is the most widespread form of liability insurance for business. Through this article, you will understand the coverage offered in this type of insurance.
In today’s legal and economic environment, a small accident and negligence in business operation can result in a large lawsuit. Expensive liability claims can have a potentially devastating impact on your business. With the increased awareness, the claim can be expected from various sources. Which is why general liability insurance is very much essential for any business to safeguard the asset against any third party claims arising out of the non-professional negligent act.
Below are the damages covered under commercial general liability insurance
Property damage
If there is a damage to third party property due to the non-professional act of an employee or any negligence from the company during its operation or in the premise, the third party can legally hold the company responsible for the damage. Commercial general liability insurance provides coverage for legal liability arising out of such claims.
For example, an insured welding contractor was appointed for a welding work on the roof of the apartment. A welding spark caused a fire in one of flat and caused significant damage. After an investigation, owner of the flat and builder initiated a claim against the contractor. The insurance company then made a settlement for the claimed amount. Insurance liability included the defence cost, legal cost and settlement cost of the claim.
Bodily injury
CGL Policy provides coverage for insured company’s legal liability for any bodily injury caused to the third party in the business premise or by its products, business operations or any activity associated with the business. Bodily injury refers to any physical injury, disease or sickness sustained by a person and severe injury resulting in death. Mental and emotional distress is also considered as a bodily injury depending on courts interpretation of the word ‘bodily injury’.
For example, a Mumbai based textile manufacturing company which is into export business had received a huge order from one of the Dubai based brands. Before proceeding with the order, the client wanted to have a quality check. One of the representatives flew down to Mumbai from Dubai. While doing a quality check at the factory premise, he slips on the wet floor and injures his spine very badly. In this case, CGL policy will cover the claim that may arise from the injured representative against a textile company.
Personal and advertising injury
Commercial general liability insurance covers the claims arising out of personal and advertising injury caused by the company. Personal and advertising injury refers to any damage caused to person’s reputation, character or position in the community. Below are the certain offences that can give rise to claim
- Slander
- Libel
- Infringing on someone’s copyright
- False arrest
- Stealing someone’s advertising idea
- Wrongful entry, eviction or invasion of privacy
- Malicious prosecution
Medical expenses cover
Usually, if any third party (a customer or anyone from the general public) suffers an injury due to an accident that takes place on your business premise, you are liable to pay the medical treatment cost. Cause of injury can be a business operation or an accident. The medical cover can be triggered even without any lawsuit. Coverage is given on no-fault basis. Below are the expenses covered under commercial general liability insurance for injured person
- Medical expenses
- Ambulance expenses
- Hospital expenses
- Surgical expenses
- Professional nursing expenses
- Funeral expenses if injury results in death
CGL policy is an essential risk management tool for any business. Having the right commercial general liability insurance policy with an adequate amount of coverage can provide you with the protection that you need for your business.