Every business or organization runs the risk of people suing them for injury or damages that arise from their business operations. General liability insurance, typically provided using a Commercial General Liability form (CGL), is an insurance contract that protects the business or organization against claims for bodily injury and property damage arising from: the premises (or property) the business operates on; the operations of the business away from their normal premises; the products the business produces; or the work the business has already completed. Some examples of each of these follow.
• Premises: A customer trips over an extension cord in an aisle of the business, falls and injures their knee. A claim for bodily injury arising from the negligence of the business in maintaining a safe premises for the public might be warranted.
• Operations: A homebuilder clearing a lot for a new house loses site of the property line and accidentally removes a tree from a neighbor’s lot. The neighbor sues the homebuilder business for the loss of their tree.
• Products: A company that assembles decorative mirrors for sale in home furnishing stores fails to use the proper hanging hardware, resulting in claims for damage and injury from mirrors that fall after hanging in customers' homes.
• Completed Operations (Work): A brake shop customer gets in an accident after having his brakes replaced. The brake shop mechanic failed to do the work properly. The customer sues the brake shop for damage to his auto and for his injuries.
In addition to these types of situations, the CGL policy would cover the employees of the business when they are acting on behalf of the business, and pay legal expenses defending the business and their employees.
Not every situation a business may find themselves in is covered by the CGL policy. There are circumstances in which a CGL policy may not pay, or provide a defense. For example, most General Liability policies exclude property coverage for items in your Care, Custody & Control. You can, however, add the Voluntary Property Damage Endorsement onto your policy. The Voluntary Property Damage Endorsement covers property of others that you damage while the property is in your Care, Custody or Control, or because of work you performed. Coverage applies regardless of negligence.
Businesses should discuss their specific operations and concerns with their Insurance Station agent to learn more.