Gabreal Belcastro and John Lingelbach | Koley Jessen
Commercial General Liability (“CGL”) insurance, also known as “business liability insurance” or simply “general liability insurance,” is a standard type of business insurance carried by companies to protect against “general claims.” “General claims” are claims brought by customers or other third parties which generally involve bodily injury or property damage and typically either (a) occur on the company’s premises, or (b) result from a business’s operations. CGL policies exist to provide coverage to businesses for general claims resulting out of non-professional negligence. CGL policies provide coverage for both negligent acts and omissions, and typically cover both the costs of legal defense and the amounts of actual damages suffered by the customer or other third party.
A CGL policy might provide coverage for a customer’s slip and fall within the policy-holder’s business establishment, or for damages to a customer’s (or another third party’s) property resulting from an employee’s negligence. A CGL policy might also cover businesses against certain advertising-related claims, including libel, slander, and copyright infringement. CGL policies typically provide coverage for all reasonably necessary emergency, medical, and funeral expenses for customers and other third-parties who are injured or killed on-premises or by a business’s ordinary operations. Likewise, CGL policies also typically cover damages resulting from advertising injuries, including harm to a third party’s character or reputation.
Notably, CGL policies do not provide coverage for the negligent performance of a business’s own services. In other words: a CGL policy generally will not provide coverage if a plumber, for instance, improperly installs a sink. Insurance companies generally do not wish to guarantee the quality of their policy holders’ work and, as a result, CGL policies typically exclude such work from coverage. However, to stick with the pluming example, if the negligently installed sink begins to leak and the leak then causes water damage to a customer’s home, the plumber’s CGL policy may kick in to provide coverage for the water damage itself.
Aside from coverage exclusions for a business’s own work, other common exclusions in CGL policies include: professional error, employee injuries, stolen or damaged business property, employee discrimination lawsuits, liquor liability, and pollution liability. It is important to read your CLG policy carefully to determine what coverage your business does (and does not) contain. If you have questions regarding your specific CGL policy, CGL policies generally, or potential claims against your business, please reach out to a member of our Litigation Practice Group for further information.
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