Understanding the Commercial General Liability Coverage Form (CGL)

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The CGL (Commercial General Liability) covers companies from third party liability due to negligent acts, actual or alleged, committed by the insured or by someone working on their behalf.

There are 3 coverage sections under the Commercial General Liability policy:

Coverage A: Bodily Injury and Property Damage Liability

Coverage A provides protection against losses from the legal liability of insured’s for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations.  Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.

Depending on the size and nature of the company different endorsements should be included that are not typically covered under a standard CGL policy.  Workers compensation and employment practices liability insurance are excluded but can be purchased as separate policies.  Liquor liability, professional liability and other risks may also be excluded.

Consult an insurance professional to determine which coverages are right for your type of business.

Coverage B: Personal and Advertising Injury

Personal and advertising injury liability protects an insured against liability arising out of certain offenses, such as:

  • Libel
  • Slander
  • False arrest
  • Copyright infringement
  • Malicious prosecution
  • Use of another’s advertising idea
  • Wrongful eviction, entry or invasion of privacy

Coverage C: Medical Payments

Limited coverage for medical payments includes payments for injuries sustained by a non-employee caused by an accident that takes place on the insured’s premises or when exposed to the insured’s business operations. Medical payments coverage can be triggered without legal action. This provides for prompt settlement of smaller medical claims without litigation. It is included in the CGL policy and pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations. There is no defense or legal liability coverage—as there is with bodily injury and property damage (Coverage A) and personal and advertising liability (Coverage B), since coverage is provided on a no-fault basis.