What is CGL Insurance aka Commercial General Liability Insurance?
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Commercial General Liability Insurance is a standard insurance policy issued to businesses & organizations to protect them against liability claims for bodily injury (BI) and property damage (PD) arising out of premises, operations, products, and completed operations; and advertising and personal injury (PI) liability. The CGL policy was introduced in 1986 and is often also referred to as a “comprehensive” general liability policy.
Why Is Commercial General Liability Insurance Needed?
Common law, which applies in all provinces in Canada except Quebec(where they operate under Civil Law) has established that business owners owe a duty of care to the public regardless of the type of business they operate. Unfortunately, accidents happen and injured people or parties may allege the following three things:
When the above the conditions are met people, parties and or their lawyers will often allege that a business has been negligent and that the business is responsible for compensating them for their damages. Demands for compensation can come in written and or verbal format and can be made by the injured party directly or by a lawyer representing the injured. This is commonly known as personal injury law and in this area of law, lawyers will typically work on a “contingent” basis, which means the injured party pays nothing up front and the lawyer only gets paid if they receive an award or settlement from the organization they allege is at fault.
What Is Covered By Commercial General Liability Insurance?
The typical Commercial General Liability Insurance policy contains numerous types of coverage including:
- Bodily Injury To Third Parties- Which means bodily harm, sickness, or disease, including resulting death that results from your business operations. Ex. a customer slips in your store and breaks their hip.
- Property Damage To Third Parties- Damage caused to property of others. Ex. a contractor accidentally damages the building next to the one he is working on.
- Products Liability- The liability for bodily injury (BI) or property damage (PD) incurred by a merchant or manufacturer as a consequence of some defect in the product sold or manufactured. Ex. customer becomes sick after eating at a restaurant.
- Completed Operations- Work of the insured that has been completed as called for in a contract, or work completed at a single job site under a contract involving multiple job sites, or work that has been put to its intended use. Ex. a plumber installs a new toilet and it begins to leak and damages the contents of the room below.
- Tenants Legal Liability- Tenant accepts responsibility for damage they may cause to the building which they rent or lease from a landlord. Ex. an asset management company employee leaves a candle burning at their desk overnight which catches fire and burns down the entire office tower.