YOU ASK:

Comprehensive general liability insurance versus commercial general liability insurance - is there a significant difference?

WE ANSWER:

To avoid confusion, comprehensive general liability is really, essentially, what commercial general liability insurance is today.

Comprehensive general liability is an old term and refers to the kind of coverage that aims to protect a company from the possible risks for liability that may arise in the course of its doing a business.

Over time, comprehensive general liability insurance took on the more correct term "commercial general liability insurance" to avoid the confusion over the word "comprehensive".

This coverage does not protect the company's assets such as buildings, equipment and other property. Instead, commercial general liability insurance will protect the company against potential damages that it may be liability for - bodily or personal injury that the business may cause, as well as property damage.

Why is this needed?

Commercial general liability insurance is needed in today's litigious society. Nowadays, people can sue for any number of reasons, and are sometimes awarded with huge compensation packages. What's more, the possibility of a lawsuit increases when you have more people coming into contact with your business premises, your products and your advertisements. And a lawsuit can cost the business quite a lot, since the trend today, particularly for punitive damages, can rise to the hundreds of thousands, and even to millions.

Examples of possible sources of lawsuits include:

  • A customer, visitor or even trespasser getting injured at your office or place of business
  • A customer getting injured due to a malfunction of your product or a service that failed
  • An employee damaging property at the customer's office

Coverage

  • Products or completed operations coverage. This includes coverage against a liability suit for bodily injury or property damage by using the product or a service your company provided. This is due to the expectation that the manufacturer or service provider has made use of all reasonable means to make sure that the product or service you provided does not have any defects.
  • Operations and premises coverage. This protects against bodily injury or property damage while the person is in your office or business premises. This may be extended to protect against any damage an employee can cause while in the premises of the client. This may also include elevator or escalator coverage.
  • Independent contractors coverage. This protects against acts of negligence by your independent contractor that result in bodily injury or property damage.
  • Personal injury. This protects against claims against damage caused to the person - his reputation, character and position in the community. The protection includes lawsuits arising from slander or libel.
  • Advertising injury. This protects against claims regarding damage caused by your advertising campaign. This can be filed by a company being disparaged by an ad or by a customer claiming that the ad made false claims.
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