As a business owner, understanding the ins and outs of Commercial General Liability (CGL) insurance is crucial for protecting your business from financial risks. Below are the top 10 most frequently asked questions by business owners like you about CGL insurance, rephrased to match how people might search for them online.
1. What is covered under commercial general liability insurance?
Question: What does CGL insurance cover for businesses?
CGL insurance typically covers your business for bodily injury, property damage, personal injury, and advertising injury that occur as a result of your operations. It protects your business if a customer slips and falls on your property, if your advertising accidentally slanders a competitor, or if your business causes damage to someone else’s property.
2. What’s the difference between claims-made and occurrence policies in liability insurance?
Question: Which is better for my business, a claims-made policy or an occurrence policy?
An occurrence policy covers any incident that happens during the policy period, even if the claim is made after the policy has expired. A claims-made policy only covers claims that are made while the policy is still active, regardless of when the incident occurred. Occurrence policies tend to offer broader protection since claims can be made long after the policy has ended.
3. Does my CGL policy cover legal fees and settlements?
Question: Will my commercial general liability insurance cover the cost of legal defense and settlements?
Yes, CGL policies typically cover legal defense costs, court fees, and settlements in addition to the policy’s liability limits. For example, if a lawsuit is brought against your business and settled before going to court, your policy will cover the settlement and related legal costs.
4. Are employees covered under commercial general liability insurance?
Question: Does CGL insurance cover injuries to my employees?
No, employee injuries are typically not covered by a CGL policy. Instead, these injuries fall under workers’ compensation insurance, which is designed to handle workplace injuries and illnesses. CGL only covers injuries or damages to third parties, like customers or vendors.
5. What offenses are covered under personal and advertising injury liability?
Question: What is personal and advertising injury liability in commercial insurance?
Personal and advertising injury liability covers offenses like defamation, slander, false arrest, copyright infringement, and other similar claims. However, businesses in specific industries (like media companies or publishers) may have exclusions related to these types of offenses, so it’s essential to review your policy carefully.
6. What happens if both the condominium association and the unit owner have coverage?
Question: Who pays for a claim if both the condo association and the unit owner have insurance?
If both the condominium association and the condominium unit owner have insurance for the same property, the association’s insurance is considered primary, and it will pay the claim first. The unit owner’s policy would only come into play if additional coverage is needed.
7. How much will CGL insurance pay for medical expenses for someone injured at my business?
Question: How much does CGL insurance cover for medical payments to an injured customer?
Under Coverage C – Medical Payments, a CGL policy will cover reasonable medical expenses for bodily injuries caused by an accident on your premises. This includes things like ambulance fees, emergency room visits, and follow-up treatments, up to a set limit defined by your policy.
8. How do exclusions work in commercial general liability insurance?
Question: What are the common exclusions in a CGL insurance policy?
Exclusions are included in CGL policies to avoid covering risks that are uninsurable or already covered by other types of insurance. For example, CGL policies exclude coverage for employee injuries (covered by workers’ comp) and damages from pollutants or war-related incidents.
9. Does my business need supplementary payments?
Question: What are supplementary payments in liability insurance?
Supplementary payments cover expenses related to legal defense and claims, beyond your policy’s limit of liability. These payments might include court costs, attorney fees, bail bonds, and lost income from attending court. They’re usually included in addition to the primary limits of the policy.
10. What happens when my business settles a lawsuit before a verdict?
Question: If I settle a lawsuit before the court reaches a verdict, what will my insurance pay?
When you settle a lawsuit, your insurer typically covers the settlement amount, along with legal fees and court costs. For example, if a visitor is injured on your premises and a settlement is reached before a verdict, the insurer would pay the agreed-upon settlement amount, as well as the legal expenses associated with defending the claim.
Final Thoughts: Protect Your Business with the Right Commercial Liability Insurance
Understanding the answers to these key questions can help you make informed decisions about your business’s commercial general liability coverage. Whether you’re deciding between policy types or understanding how exclusions work, it’s important to have the right coverage to protect your business from unforeseen risks.
Need more help? Contact Vantage Point Risk today to explore your CGL insurance options and get the coverage your business needs.
