Commercial Liability Insurance
A Commercial General Liability (CGL) insurance policy will usually cover the costs of your legal defense and will pay on your behalf all damages, if you are found liable (up to the limits of your policy). This coverage is one of the most important insurance products, due to the negative impact that a lawsuit can have on a business. It is also because such liability suits happen frequently. You can purchase commercial general liability insurance as a stand-alone policy, as part of a Business Owners Policy, or as part of a Commercial Package Policy.
Commercial General Liability Insurance provides the following coverages:
- Bodily Injury and Property Damage Liability (Errors & Omission): This coverage provides protection against losses from the legal liability of the insured for bodily injury, property damage to others, or damage to other people's data, arising out of non-professional negligent acts, or for liability arising out of their premises or business operations. Mental injuries and emotional distress can also be considered bodily injuries, even in the absence of physical bodily harm. This insurance is very important for licensed professionals such as accountants, attorneys, insurance agents, architects, and engineers.
- Employment Practices Liability Insurance (EPLI): This coverage provides protection to businesses against claims by workers (sexual harassment, discrimination, wrongful termination, breach of employment contract, deprivation of career opportunity, mismanagement of employee benefit plans, etc.) that their legal rights as employees of the company have been violated. The cost of EPLI coverage depends on your type of business, the number of employees you have, and various risk factors, such as whether your company has been sued over employment practices in the past. These policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. They also cover the legal costs, whether your company wins or loses the suit. Policies also typically do not pay for punitive damages or civil or criminal fines.
- Medical Payments: This coverage pays for injuries sustained by a non-employee caused by an accident that took place on the insured's premises. Medical payments coverage can be triggered without legal action. The coverage 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.
- Directors' and Officers' Liability (D&O): This insurance protects past, present, and future directors and officers, of profit or nonprofit companies, from damages resulting from alleged or actual wrongful acts they may have committed in their positions. The policy provides protection in the event of any actual or alleged error, misstatement, omission, misleading statement, or breach of duty. In addition, some policies extend the same coverage to employees.