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What is public liability insurance?

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A company is exposed to risk of public liability on a daily basis. The owner of a business owes its customers the highest degree of care, thus being legally responsible for any harm inflicted on the customers as a result of the operations of the business.

Public Liability Insurance Coverage

Public liability insurance, more commonly known as Commercial General Liability (CGL) insurance, is designed to financially protect businesses from public liability claims. Since companies stand a substantial risk of being sued, they need adequate public liability protection if they want to stay in business and continue their operations.

A public liability claim can cost the unprotected business owner millions of dollars, if not insured.

Commercial General Liability insurance provides a basic business coverage against claims arising out of bodily injury, property damage, advertising injury and personal injury (such as defamation of character). Under a public liability policy, the insurer pays damages for claims of injury that you or your workers have caused. Here are some characteristics of the coverages that public liability insurance provides:

  • Premises and Operations liability protects businesses when claims are made for injury or damages sustained on the company's premises as a result of the business's operations.
  • Medical Expenses coverage - your policy covers the medical expenses of the people injured on your premises.
  • Defense Costs - the insurer also covers the defensive and settlement costs.
  • Personal and advertising injury liability - the insurer covers any damages that the insured has to pay as a result of torts such as slander, libel, malicious prosecution, copyright and patent infringement, privacy violation, etc.
  • Fire Damage liability coverage - provides protection against injury or damage claims as a result of a fire on the premises of your business.

In the so-called Business Owner's Package, public liability insurance is combined with a property package. Further protection in the form of umbrella (excess liability) policy, worker's compensation policy and errors and omissions/professional liability policy can be added.

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