How does commercial general liability insurance work?

Every business owner faces certain risks of legal liability which may arise out of their business operations or which may occur on their commercial premises. Commercial general liability insurance has been designed to protect business owners against a number of general liability loss exposures.

General Liability Loss Exposures insured against:

• Premises and Operations Liability.

  Any liability that may arise out the named insured's business operations, is covered under General Liability insurance, regardless of where the injury or damage has occurred. The insured is also protected against liability for any injury that may occur on their commercial premises.

• Products Liability.

  People whose business involves the designing, manufacturing, selling or distributing of products, are exposed to the risk of being held liable by consumers if their products are found to be defective.

• Contingent Liability.

  In certain situations a business owner may be held liable for damage or injury caused by independent contractors hired by the insured.

• Contractual Liability arises when a one party agrees to assume legal liability on behalf of another party by contract.
• Completed Operations Liability might occur after a certain operation or work is completed in a faulty way.

What Commercial General Liability Insurance Covers

A Commercial General Liability policy has five major sections, each of them specifying matters of importance, such as the policy characteristics, conditions, limits and definitions. The most significant element of a Commercial General Liability policy, however, is Section I detailing the types of liability covered under the policy.

The Commercial General Liability coverages can be described as follows:

• Coverage A provides protection for liability arising out of bodily injury or property damage to a third party.
• Coverage B guarantees that the insurer will pay the legal expenses on behalf of the insured if the latter is found liable for personal and advertising injury.
• Coverage C pays the medical expenses of an injured third party on behalf of the named insured, regardless of liability.

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