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The Commercial General Liability Policy
is the primary liability policy providing protection for a business. It
pays for damages for bodily injury or property damage to a third party
for which the insured is legally responsible. The policy provides coverage
for liability arising from personal injury and advertising injury.
Coverage for medical expense is also provided. The policy also covers
accidents occurring on the premises or away from the premises. Coverage is
provided for injury or damages arising out of goods or products made or sold by
the named insured. In addition to the limits, the policy provides
supplemental payments for attorney fees, court costs and other expenses
associated with a claim or the defense of a liability suit.
What it
Covers
Claims made
against the business for bodily injury or property damage occurring during
the policy period are covered. Claims must be made by a third party
and arise from the business operation of the insured. Bodily injury
includes mental anguish, a common injury these days. Property damage
will include the loss of use of damaged property. Any related
defense costs are also included. If a business is sued for a covered
claim, the insurance company should provide a defense at their
expense. Personal and Advertising Liability is included for such
claims as false arrest,
malicious prosecution, detention or imprisonment, the wrongful entry or eviction,
copyright infringement, printed or oral libel or slander. Typical
claims may include: slips and falls; product liability; operation of
mobile equipment; job site injury or damage to others.
As with most
policies, coverage is given for all claims which meet the above criteria
and are not excluded or limited. Common exclusions include: expected
or intended injury; pollution; aircraft, auto or watercraft use; product
recall. It is also important to note that injury to an employee is
NOT covered by a general liability policy. As with the auto,
aircraft and watercraft exclusion, coverage for employee injury is
intended to be covered under another policy type. Most policies will
also exclude any employment practices liability. This includes
discrimination, sexual harassment, wrongful termination and other
employment related claims.
Another
important, but complicated exclusion group deals with property damage
limitations. Basically, any damage to property which you own, lease,
occupy or is in your care, custody and control is not covered. These
issues are better covered with a commercial property policy.
However, limited coverage for fire damage to a building you lease or rent
is included if you are legally liable for it. Coverage for damage to
your product is not included. Damages caused by the product are
covered, but not for damage to the product itself. Similarly, damage
to your work is not covered.
Who is
Covered
The
following are always included as an "insured" -- the business
(usually, the "named insured"); the individual owner, corporate
officers, partners, employees and others acting on your behalf within the
scope of the business operation. If the named insured chooses,
others may be included as an "additional insured." This
may include a landlord, customer or other business which you are leasing
or renting property or equipment from. It is common for a
subcontractor to name the general contractor as an additional insured.
Limits of
Insurance
General Aggregate
The General Aggregate Limit is the most money the insurer
will pay under a certain coverage for all claims occurring during the policy
term. All claims paid during the length of the policy reduce the aggregate
limit. For example, with a $1,000,000 general aggregate and a
$500,000 each occurrence limit, three claims for $300,000 can be paid
under the general aggregate. However, if a fourth $300,000 claim
occurred, only $100,000 would be left available under the policy.
Products/Completed Operations
Aggregate
A separate
aggregate limit is provided for products and completed operation claims.
Personal &
Advertising Injury
The most
payable for personal injury or advertising injury liability.
Each Occurrence
Limit
This is
the most payable for any one occurrence. An occurrence is
considered to include all claims for injury and damage which come from
the same general event. Defense costs are not counted against the
occurrence or aggregate limit. In fact, there is no limit on
defense costs. But, once the limit of insurance is paid out, all
defense from the insurance company ends.
Fire Damage Limit
This is
the most paid for fire damage
caused by negligence on the part of the insured to premises rented to the named
insured.
Medical Expense Limit
Medical Payments coverage pays medical expenses resulting
from bodily injury caused by an accident on premises owned or rented by the
insured, or locations next to such property, or when caused by the insured's
operations. These payments are made without regard to the liability of the
insured. This is often referred to as good will coverage. If someone
is clumsy and falls down on your property, it is not necessarily your
fault. However, most people are not willing to accept that they
are clumsy and believe everything is someone else's fault. Medical
expense coverage offers the opportunity to voluntarily pay any related
medical expenses in the hope of avoiding a law suit.
Limit
Options
General Aggregate/Occurrence Limits
$ 600,000 / $ 300,000
$1,000,000 / $ 500,000
$2,000,000 / $1,000,000
Personal and Advertising Injury Limits
$ 300,000
$ 500,000
$1,000,000
Fire Damage Limits
$ 50,000
Medical Expense Limits
$ 5,000
Now you know
what it is.... Want to see what it will cost?
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