Every business needs Commercial General Liability insurance! Most likely, any business that purchases insurance has several forms of coverage including Commercial General Liability. This may be a stand alone (mono-line) liability policy or it may be included within a commercial package policy, business owners' policy, etc. In a nutshell, Commercial General Liability insurance protects the business for loss arising from bodily injury or property damage caused by the negligence of the insured and it protects the insured in more ways than one may think! The typical Commercial General Liability policy shows six dollar limits:
AGGREGATE LIMITS. Most general liability policies have two "aggregate" limits; a "general aggregate" and a "products and completed operations aggregate". The word "aggregate" simply means the sum total, or in the case of insurance, the maximum amount a policy will pay during the policy term. Think of them as buckets containing the number of dollars shown on the policy. Once all of the dollars are used, the policy has paid all that it can pay. The products and completed operations aggregate (or bucket) only spends its dollars on claims that arise from an injury or damage caused by the product you make or sell, or as a result of work that you have done. The general aggregate (or bucket) spends its dollars on anything else that is covered by the policy. In limited instances, policies may have only one aggregate - usually noted by the word "included" rather than showing a dollar amount for the products and completed operations aggregate. When this happens, the policy is, in effect, providing only half the coverage as a policy that indicates a dollar amount for each aggregate.
- General Aggregate
- Products and Completed Operations Aggregate
- Personal and Advertising Injury
- Each Occurrence
- Damage to Premises Rented to You
- Medical Payments to Others
PERSONAL AND ADVERTISING INJURY. This is Coverage B within the policy and provides protection for injury arising from the following causes of loss, and is automatically included in the commercial general liability policy:
- False arrest, detention, imprisonment
- Malicious prosecution
- Wrongful eviction
- Libel, slander
- Violation of a person's right to privacy
- Use of another's advertising idea
- Infringement of copyright, trade dress or slogan in your advertisement
EACH OCCURRENCE. This is not a coverage, per se, rather it sets the maximum limit that the policy will pay for any single occurrence. The policy's overall limit is that aggregate described above. For example, if a commercial general liability policy has an occurrence limit of $300,000 and aggregate limits of $600,000, this means that the policy would pay no more than $300,000 for any one loss, and the policy could cover no more than two $300,000 losses during the policy term.
DAMAGE TO PREMISES RENTED TO YOU. This is the amount of insurance the policy allows for damage caused to the premises rented to the insured. True, the landlord should always have insurance in place to cover the building being rented to you. But if damage to the landlord's building is caused by the insured's negligence, the landlord's insurance company can subrogate or come to you for reimbursement of their repair expenses. If damage occurs to a portion of the building that is not rented to you, the coverage would come from the "Each Occurrence" limit. A common limit for Damage to Premises Rented to You in commercial general liability policies is $100,000 and this limit can be increased.
MEDICAL PAYMENTS. This is intended to pay for certain medical expenses arising from an accidental bodily injury on your premises or because of your operations. A common limit found in the commercial general liability policy is $5,000 and it is available for first aid or other immediate costs like X-rays to the injured person. Sometimes, offering to pay these expenses can help avoid a lawsuit. Medical Payments does not apply to employees, workers or to the insured.
For more information on Commercial General Liability insurance contact us at 800-220-5582, visit the GENERAL LIABILITY page on our website, or contact us online.
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