Commercial General Liability Insurance (CGL)


What is in a General Liability Policy?

Under a general liability insurance policy, the insurer is obligated to pay the legal costs of a covered business in a covered liability claim or lawsuit. Covered liability claims most of the time include bodily injury, property damage, personal injury and advertising injury (damage from slander or false advertising).

The insurance company also covers compensatory and general damages resulting from a lawsuit.
Punitive damages aren’t covered under general liability insurance policies because they are considered punishment for intentional acts.

The personal and advertising injury limit and products and completed operations limit may be excluded in general liability policies in professions such as environmental consulting, engineering, legal professions, and dental professions among others.
In these professions those limits would be covered in a professional liability policy, which is advised in combination with a premises liability policy for property damage or the slip-and-fall type injury.

With regard to general liability policies, taking precautions to prevent accidents can help keep your liability and your insurance rates down.

Tips for reducing chances of claims

  • Set a high standard for product or completed operations quality control.
  • Make sure all company records are complete and up to date.
  • Be sure employees are properly trained and hold regular safety meetings.
  • Get safety tips for your type of business from your insurance company.

Determining premium levels

While insurance companies try to be competitive, each insurer makes decisions based on its own data and experience insuring businesses of similar risk, statistical information on the field of business and business objectives.
So, if one particular company has experienced a higher rate of loss on a particular field of work, its premiums will likely be higher than another company whose loss ratio is lower.

Other factors include:

Perceived risk. You should first consider the amount of risk associated with the business.

For example, a home builder is at a greater risk of being sued for a defect on their completed operation than a company engaged in interior painting and wallpapering, and would therefore pay a higher rate for liability insurance.

State and zip code. Businesses that operate in states like California, which has a history of litigation and awarding high damage amounts to plaintiffs, typically need to carry liability insurance with higher coverage limits.

We will gladly answer any questions you have in this regard to make sure that your company is appropriately covered.

Policy review tips

Review the following in the liability insurance policy:

  • Is the dollar amount of the coverage sufficient?
  • Is the deductible too large?
  • Does the policy cover bodily injury to customers and guests on the company’s premises?
  • Does the policy cover property damage caused by employees and third parties?
  • Does the policy cover personal injuries?
  • Does the policy cover advertising injury?
  • Does the policy cover problems stemming from the company’s products, or is a special policy needed?
  • Does the insurer have a solid history of paying claims on time?
  • When does a claim have to be made?
  • Are the exclusions from coverage too broad?
  • Are there special endorsements that may be appropriate?