Commercial General Liability

Commercial General Liability (CGL) is the base for business-type insurance. The intent of this liability coverage is to respond to claims that are related to your business activities. The contractor who uses his vehicle for transporting goods and tools is using his commercial automobile insurance coverage for his actions while in his vehicle. Once he steps out of that truck that coverage stops. Now his CGL protects him from his accidental injury to persons or property.

The name on the policy is very important. If you are "John Smith operating as John's Carpentry" then the policy should reflect that you John Smith are the owner and insured. If you have a numbered corporation then that name needs to appear on the policy.

A CGL will start at $1 million and go up. The usual policy will include personal and advertising injury, products and completed operations, an aggregate and occurrence limit, tenants legal liability, medical expenses, and can include a vehicle operated by an employee that is not owned by the company.

Some examples of how a CGL responds to claims could include:

  • A restaurant is sued for serving food that is tainted.
  • A staff member tosses a cigarette into a bin that bursts into flame causing property damage to the business next door.
  • A client trips over a salesman's briefcase while viewing a presentation.
  • An employee of a plumbing company flips the wrong switch to turn on furnace. Freeze up results causing damage.
  • A wet walkway is not flagged correctly and a visitor to the building slips and falls.
  • You speak against a fellow professional resulting in their economic injury.

Of course, insurance always has limitations and exclusions. The CGL will not respond to any deliberate or criminal acts. It will not respond to a claim of sexual harassment, wrongful dismissal or if you make a bad financial decision.

Your CGL will not just have liability coverage but can also include your stock, contents, inventory, tools, equipment, electronic data processing, crime, accounts receivable, business interruption and equipment breakdown. You need to work with an agent or broker to be sure that you have adequately considered your needs.