What is Commercial General Liability Insurance?
Businesses face liability exposures every day while conducting normal operations. Commercial General Liability Insurance provides a cost effective means of protection against potential liability loss. A liability loss occurs when a business is legally responsible for damages resulting from standard business operations. Legal liability can be imposed by civil law and is based on negligence, strict liability torts, contracts, and other statutes that define legal duties and standards of care. (Criminal acts, however, are never covered.) To protect against these losses, businesses rely on their general liability coverage.
A Commercial General Liability Policy insures against many of the common liabilities faced by a commercial business. It covers the company’s premises, operations, products, and completed operations. Premises Liability insurance covers liability due to ownership, use, or occupancy of the business’s premises. For example, if someone breaks his arm as a result of slipping and falling on the stairway, this would be considered a premise loss. Operations liability insures the activities of the business. For instance, this policy would cover the damage from a flooring contractor accidentally breaking a nearby table top lamp during an installation. Products liability addresses legal damage caused by products sold or distributed. Examples include a new gas grill that explodes on an owner’s patio and damages the house. Completed Operations coverage protects the business for damages that are incurred upon completion of a job, such as the loss that results from injuries sustained due to the collapse of a newly-completed balcony.
What are some coverages provided by a Florida Commercial General Liability Policy?
A Commercial General Liability Policy offers the following primary coverage:
• Bodily Injury and Property Damage – Bodily Injury is defined as bodily injury, sickness, disease, or death sustained by a person. Property Damage is physical injury to tangible property, including loss of use of that property.
• Personal Injury and Advertising Liability – Includes coverage for a wide variety of offenses such as false detention, malicious prosecution, wrongful eviction, slander, libel, and copyright infringement. Injuries can include mental anguish, fright, shock, and loss of reputation.
• Medical Payments – Provides medical expenses, including funeral expenses, for bodily injury caused by an accident on premises owned or rented. Coverage can also apply to losses that occur away from the owned or rented premises, if the accident is caused by operations of the Named Insured. It is not necessary to prove legal liability for settling minor losses covered by medical payments.
Is it important to consider common exclusions found in general liability policies because these exclusions present significant loss potential. The business owner may choose to insure against some of these exposures with a different type of policy. Examples include:
• Damage that is expected or intended
• Injury to employees
• Liability for aircraft, autos, and watercraft
• Cost of recalling products or work
• Damage to property in the care, custody, and control of the insured
What are some additional coverage options available in Florida?
There are some significant general liability exposures that are covered by various endorsements, but are not covered by a standard general liability policy. Examples include:
• Employee Benefits which protect against losses that result from improper error or omissions in the administration of employee benefits.
• Boats of limited size itemized in the endorsement for boats owned or used by the business.
• Additional insured extends coverage to other organizations for whom the business is performing operations.
Some common forms that provide very specific coverage are:
• Liquor Liability Coverage – Provides coverage for a business that manufactures, distributes, sells, serves, or furnishes alcoholic beverages.
• Products/Completed Operations Liability – Insures products and completed operations that are excluded from the standard general liability policy because of their hazardous nature.
• Owners and Contractors Protective Liability Coverage – The contractor purchases this type of insurance to provide protection to a property owner for damages that result from the contractor’s work or supervision of a construction project. Many times the contractor will be required to purchase this insurance on behalf of the property owner.
• Pollution Liability Coverage – Provides additional pollution liability protection that is excluded by the standard general liability policy. It also covers losses that occur on designated premises and underground storage tanks.
Does a Commercial General Liability Policy have deductibles?
Generally, deductibles are not used in General Liability Policies. However, there are some deductible options available as endorsements that are tailored to meet the specific needs of a business.
This is a general description of Commercial General Liability policy. It is not an explanation of own personal insurance policy. You must refer to your own individual policy to determine its coverage, definitions, limits, conditions, and requirements.