For many businesses, commercial general liability insurance is among their most important coverage, as it protects them from liability after an accident occurs on their premises. Yet, many individuals harmed in these types of accidents may not understand what this insurance is, what it covers, or how it can help them following an accident.
For these reasons, we have prepared the following blog post. In it, we hope to clear up some of the misunderstandings and confusion surrounding commercial general liability coverage by going into detail about this coverage, what exactly it covers, and how an experienced personal injury attorney can help you take on these insurance claims and get you the money you need.
What Exactly Is Commercial General Liability?
Commercial general liability (CGL) is a type of insurance policy that offers coverage to a business for personal injuries, property damages, and bodily injuries caused by the company’s products, operations, or injuries that occur on their premises. Yet, although commercial general liability is considered comprehensive business insurance, it does not cover all the risks a company may endure. For instance, it usually only covers non-professional negligent actions.
Some examples of situations where a business may need commercial general liability include:
- When a company’s employee caused substantial damage to a customer’s home
- When a business is dealing with a lawsuit filed against them claiming libel or slander
- When a company is being sued by a customer who slipped on their wet floor
How Does Commercial General Liability Insurance Work?
Typically, when a business has commercial general liability insurance, the insurance shifts the liability away from the business after an accident to the insurance company. As a result, the policy will pay the costs that result from the damages and injuries of the accident, such as repairs and medical expenses and the defense of the business in the event of litigation.
Consequently, following an accident, if a company has commercial general liability coverage, you will work with the company’s insurance company to recover the money you need for the losses and harm you endured. However, although the process may appear relatively straightforward, it does not always play out that way. For these reasons, it is often in your best interest to work with an experienced injury attorney to make sure you can recover the money you need from these insurance companies.
The Two Types of Commercial General Liability Insurance Policies
There are two types of commercial general liability insurance policies
They include policies that cover claims regardless of when the event took place and an occurrence policy where the event must take place during a specific, set period.
- Occurrence policies: This policy covers damages and injuries that occur when the policy is in effect, no matter the date of the claim. For instance, if a customer fell in a store but did not report the accident for some time, and the policy has since lapsed, the business would still be covered for the claim if the injury occurred while the policy was in effect.
- Claims-made policies: This policy bases coverage on when the claim is made. It does not matter when the damage or the injury occurred as long as the plaintiff filed the claim when the policy was in effect. This policy commonly covers the risks associated with business operations, such as potential mistakes associated with errors and commissions in financial statements.
What Does Commercial General Liability Insurance Cover?
A commercial general liability insurance policy will usually cover all the damages a business must pay if it is found liable for an accident and the company’s legal defense needed to take on this situation. However, the policy will only cover up to its limits.
This means that a commercial general liability insurance policy will include the following coverage:
Bodily Injury and Property Damage Liability Coverage
This type of coverage protects the business from the legal liability related to property damage or bodily harm arising from non-professional negligent acts or liability resulting from business operations. In addition, emotional distress, mental anguish, and other pain and suffering damages can also be considered a bodily injury, even if there is no physical bodily harm that results from the incident.
However, employment practices liability and workers compensation claims are not included under this policy but rather need to be purchased by the company as a separate policy. In addition, pollution liability is excluded, along with professional liability, liquor liability, and other risks.
Advertising and Personal Injury Coverage
This specific coverage protects a business against liability arising out of these offenses:
- False arrest
- Infringing on another’s copyright
- Malicious prosecution
- Using another company’s advertising idea
- Wrongful eviction, entry, or invasion of privacy
Medical Payment Coverage
Medical payment coverage includes limited coverage for medical payments, including payments for harm sustained by non-employees caused by an incident on the company’s premises. Legal action needn’t trigger this coverage, which allows for prompt settlement of smaller medical claims without the need for litigation.
Usually, this medical payment coverage takes care of all the reasonable and necessary medical costs such as surgeries, hospital stay, prescription medications, doctor visits, and even funeral expenses for an individual killed on the company’s premises or arising from the company’s operations.
What Does Commercial General Liability Not Cover?
Even though commercial general liability covers numerous issues that can protect a business, it does not cover everything.
For instance, this policy does not help a company with these problems:
- Commercial motor vehicle crashes that are caused by an employee driving for work. These types of accidents often need a separate commercial automobile insurance policy to cover the costs of damages
- Damages to the company’s property
- An employee’s illness or injuries that result from work. In these instances, workers’ compensation insurance provides these employees benefits to help them recover from their work-related illness or personal injury
- Professional services errors
- Claims that are more expensive than the company’s policy limits
- Wrongful or illegal acts that the business or its employees did purposefully
- Employee discrimination lawsuits
Examples of Lawsuits Covered by Commercial General Liability Insurance
Although many individuals may have a basic understanding of how this coverage works, they may not understand how this policy plays out in the real world. For these reasons, we have come up with some common examples where this type of policy arises.
#1. A Property Damage Lawsuit
A contractor is doing work on a house and forgets to shut off the water. As a result, the water floods the house and causes thousands of dollars in property damage. In this instance, commercial general liability insurance can help the homeowner recover money for their property damages.
#2. A Customer Injury Lawsuit
A customer enters a business and does not see electric cords on the ground. They subsequently fall, break their arm, and sue the company for their injuries, pain and suffering, and medical damages. In this instance, commercial general liability insurance will cover these costs.
#3. A Slip and Fall Injury Lawsuit
A customer enters a business right after an employee mopped the floor. Because of the wet spot, the customer slipped, fell, and injured their ankle, requiring multiple surgeries. In this situation, commercial general liability insurance will help cover the costs associated with the injury.
#4. An Advertising Lawsuit
A company puts out an advertisement claiming false things about its competitor. If the competitor loses customers because of this false statement, the company can face a defamation claim. Consequently, a commercial general liability policy will need to cover this defamation claim on behalf of the company.
#5. A Product Liability Lawsuit
A customer purchases a product from a business only to be injured because the product had a faulty design. The customer sues the company for their medical costs and the commercial general liability policy will help the business cover these costs.
#6. What Does the Insurer Pay For In these Instances?
In the following examples, the insurer would cover the cost of the lawsuit up to the commercial general liability policy limit, including paying for a lawyer to represent the business and covering the final settlements or judgment in the case.
Does the Law Require Commercial General Liability Insurance?
States usually do not require companies to have commercial general liability insurance. However, they may mandate this insurance for certain industries like the construction industry. In addition, although the law may not require it, many companies may still have this type of insurance because their landlord, clients, or mortgage company requires it.
That is why if you suffered injuries in a business establishment or harm due to a company’s operations, reach out to an experienced personal injury lawyer to discuss your options. These lawyers can go over your accident, figure out what happened, and review the company’s insurance policies to determine what compensation you can pursue.
Do Independent Contractors Have General Liability Insurance?
An independent contractor is a business, person, or corporation that provides services or goods under a verbal agreement or written contract. However, unlike other employees, these independent contractors do not work consistently for an employer but rather only when required.
Yet, although these contractors usually do not have a physical location or expensive equipment like other business owners, they too can be sued and held liable for a customer’s property damages, advertising injuries, or physical injuries. That is why many of these contractors have this type of insurance, as they can still benefit from it.
However, if these independent contractors do not have general liability coverage, another party may cover them as an additional insured. That is why after an accident, you must speak with a skilled and knowledgeable injury attorney who can figure out if general liability insurance covers these contractors, and if so, help you pursue the compensation you require.
How Can an Attorney Help You Handle Commercial General Liability Insurance Claims?
If an accident on a business’s premises or a business’s operations harmed you, you deserve compensation and justice for the harm and losses you sustained. Unfortunately, even if the company has commercial general liability coverage, obtaining this money is not easy.
Thankfully, with an experienced injury lawyer on your side, you will not have to worry about tackling this complicated ordeal on your own.
Instead, these lawyers can take this fight on your behalf and go after the money you need by:
- Determining if you have a valid claim and figuring out what legal options you have and which ones you should pursue
- Answering all the concerns and questions you have about your accident and the legal process involved
- Investigating the incident and securing the evidence needed to show what happened and who was at fault
- Bringing in the experts such as doctors, engineers, and accident reconstructionists to substantiate your claim
- Ensuring that legal motions are prepared correctly and filed before time runs out
- Handling all the negotiations and discussions with the insurance company
- Taking your case to trial if the insurance company is not willing to provide you with a fair settlement offer and going after the maximum damages you deserve
For these reasons, do not wait to seek legal help after an accident occurs because of a company’s wrongful, negligent, or reckless actions. Instead, reach out to an experienced injury lawyer today for a free case evaluation and let these legal professionals show you how they can fight for the financial recovery you deserve.
Since starting his firm in 1999, Stewart J. Guss has had the honor of representing clients from all over the world, helping them recover from even the most catastrophic injuries.
Today, thanks to a strong belief in those values of compassion, respect, and approachability, the firm has grown to employ over 120 legal professionals in numerous offices across 4 states, with nationwide reach.