Commercial General Liability (CGL) is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’ operations, products, or injury that occurs on the business’ premises. Commercial general liability, or CGL, is considered a comprehensive business insurance, though it does not cover all risks that a business may face. For example, transport operators and logistics companies would require more than a commercial general liability can provide to insure the liability exposures arising from their operations.
Unlike a standard Public Liability policy, a commercial general liability policy has different levels of coverage. A policy may include premises coverage, which protects the business from claims that occur at the business’ physical location during regular business operations. It may also include coverage for bodily injury and property damage that is the result of finished products. Excess liability coverage can also be purchased in order to cover claims that exceed the limit of the CGL policy. Some commercial general liability policies may have exclusions to what actions are covered. For example, a policy may not cover the costs associated with a product recall.
Occurrence and Claims Made Basis
When purchasing commercial general liability insurance, it is important for you to differentiate between a claims-made policy and an occurrence policy. A claims-made policy provides coverage over a specific time period and covers claims that are made during that time period even if the claim event occurred outside that time period. An occurrence policy is different in that it covers claims for events occurring during a specified time period and does not cover claims stemming from claim events that occurred before the commencement of policy.
Commercial General Liability vs Comprehensive General Liability
To avoid confusion, comprehensive general liability is really, essentially, what commercial general liability insurance is today. Comprehensive general liability is an old term and refers to the kind of coverage that aims to protect a company from the possible risks for liability that may arise in the course of its doing a business. Over time, comprehensive general liability insurance took on the more correct term “commercial general liability insurance” to avoid the confusion over the word “comprehensive”.
This coverage does not protect the company’s owned assets such as buildings, equipment and other property. Instead, commercial general liability insurance will protect the company against potential damages that it may be liability for bodily or personal injury that the business may cause, as well as property damage to third party and public property.
Commercial general liability insurance should be a fundamental cover in any corporate insurance programme given today’s highly litigious society.
A typical cover would include:
- Products or completed operations coverage
This includes coverage against a liability suit for bodily injury or property damage by using the product or a service your company provided. This is due to the expectation that the manufacturer or service provider has made use of all reasonable means to make sure that the product or service you provided does not have any defects. - Operations and premises coverage
This protects against bodily injury or property damage while the person is in your office or business premises. This may be extended to protect against any damage an employee can cause while in the premises of the client. This may also include elevator or escalator coverage. - Independent contractors coverage
This protects against acts of negligence by your independent contractor that result in bodily injury or property damage. - Personal injury
This protects against claims against damage caused to the person – his reputation, character and position in the community. The protection includes lawsuits arising from slander or libel. - Advertising injury
This protects against claims regarding damage caused by your advertising campaign. This can be filed by a company being disparaged by an ad or by a customer claiming that the ad made false claims.
Further extensions and levels of cover can include:
- Contractual Liability
- Broad Form Property Damage (Care, Custody & Control)
- Cross Liability
- Employees Added As Additional Insureds
- Personal Injury
We assist in providing some of the most comprehensive commercial general liability products in the market, designed to meet the needs of clients in and around the Asia Pacific Region.
Our belief is insurance should be simple and straightforward. Our clients should expect to have their insurance requirements dealt with professionally, explained to them in a language they can understand and, most importantly, have delivered to them a bundled solution which is customised and suits their very individual needs.