Your organization can become liable to third parties for injury or property damage in a variety of ways. Commercial liability coverage is often included in a package policy along with property insurance, such as a Business Owners Policy or BOP. It may also be issued as a stand-alone policy called a Commercial General Liability (CGL) policy.
Commercial general liability coverage addresses these principal sources of claims:
- Premises
- Products and completed operations
- Personal injury (such as libel, slander, false arrest, invasion of privacy) and advertising liability (such as advertising that libels, slanders, etc. and violations of privacy, misappropriation of ideas, copyright infringement, etc.)
- Fire damage liability (for damage to leased or rented premises)
Many commercial liability policies offer a number of additional features, such as:
- Automatic additional insured, which provides automatic coverage when required by a contract, agreement or permit.
- Medical payments, paid to injured third parties where goodwill, not fault, is the determining factor, usually with a low sub-limit such as $5000.
- Employment practices liability, for claims, including legal defense costs, brought by employees or job applicants, usually with a low sub-limit.
The cost basis of general liability insurance, whether payroll, sales, square footage or other measure, depends on the type of business involved. Policies can be claims-made (which provide coverage only while the policy is in effect, unless modified) or occurrence (where the policy in effect when the accident occurred is intended to provide coverage).