Know your Coverage Under Commercial General Liability Insurance Policy

Business owners today are bombarded with all kinds of advertisements, phone calls, and sales pitches asking them to purchase insurance for their businesses. It can be overwhelming to figure out what is needed.

Many eventually chose a Commercial General Liability insurance policy (“CGL”), because they are a good way to get basic coverage for your business. However there are limits to what is covered by a CGL policy. While proper commercial insurance is important to ensure that your business is protected from everyday risks, you also need to know the exact coverage and limitations of your specific policy to understand if it is actually meeting your needs.

Typical Coverage Under a CGL

Every policy is different, but many CGL policies have similar standard coverage. There are several basic categories of standard coverage under most CGL policies. These include: 1) Bodily injury 2) Property Damage 3) Personal Injury and 4) Advertising Injury.

Bodily injury generally covers physical injury to a customer on your business premises or as a result of your finished work. Bodily injury does NOT normally include injury to any worker. Property damage generally includes any damage done by your business to a customer’s property either on your premises or as a result of your work. However, the property damage component of a CGL policy does not cover damage done by company vehicles involved in accidents on the road. Personal injury covers any injury caused by your business that is not physical. This would include injuries like slander and libel. Finally coverage under the advertising injury covers any copyright infringement or any injury done by your business as a result of any advertising.

In addition to the above coverage included in most policies, CGL policies generally include the costs to defend against or settle claims related to the above coverage. This means that even if a claim filed against your business is fraudulent, if it falls under the above categories the insurance company will pay to defend you.

CGL policies usually have a maximum dollar limit as to how much the insurance will pay in regards to claims against your business. Once the dollar limit maximum of the policy has been reached, the business is responsible for any liability over that maximum.

There are two ways most policies calculate their dollar maximum. The first, and most straight-forward, is the “per occurrence” dollar maximum. As the name suggests, this means that the dollar maximum covered by your policy is for each claim that is made against you, the insurance company will pay up to the maximum dollar amount. The second is the “claims-made” method. Under this method, the insurer will pay up to the maximum dollar amount for all claims made during the policy period. The business would be responsible for any money over the maximum amount for the policy period.

Help with CGL Policies in New Jersey

While there are some limits to CGL policies, additional coverage can usually be purchased to meet your specific needs. When purchasing insurance in our area it is important to have a conversation with your insurance agent as well as with a good Moorestown business attorney to make sure your business has an insurance plan that provides sufficient coverage. Protecting your business is an important task and should be done after you know all the facts and thoroughly understand what risks are presented by your particular enterprise.