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The general liability policy provides the insured with protection against legal liability for which the law provides money damages as a possible remedy. This liability may arise out of actions or
omissions of the insured or the insured’s employees, or the actions or omissions of others, the liability for which is assumed by the insured through contracts. General liability insurance coverage will pay on behalf of the insured for: (a) the damages, up to the policy limits, for which the insured is liable;
(b) defense and investigation costs, in addition to the policy limits; and (c) certain specified
supplementary payments (i.e., expenses incurred by the insured in assisting the company in the
investigation of suits). The industry standard general liability form is the ISO CGL coverage form
(CG 00 01). The term “CGL” also refers to general liability forms developed by individual insurers,
most of which are similar to the ISO form.
Commercial Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the “insured”) from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy. Commercial Insurance Near Me has dedicated carriers, usually for-profit, to offer protection against specified perils in consideration of a premium.
Liability insurance is designed to offer specific protection against third party insurance claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract.
In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured. The legal costs of a defence normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defence costs tend to soar when cases go to trial. In many cases, the defense portion of the policy is actually more valuable than the insurance, as in complicated cases, the cost of defending the case might be more than the amount being claimed, especially in so-called “nuisance” cases where there is no liability but the case has to be defended anyway.
Generally, commercial liability insurance covers only the risk of being sued for negligence or strict liability torts, but not any tort or crime with a higher level of malice aforethought. This is usually mandated by the policy language itself or case law or statutes in the jurisdiction where the insured resides or does business.
In other words, liability insurance does not protect against liability resulting from crimes or intentional torts committed by the insured. This is intended to prevent criminals, particularly organized crime, from obtaining liability insurance to cover the costs of defending themselves in criminal actions brought by the state or civil actions brought by their victims. A contrary rule would encourage the commission of crime, and allow insurance companies to indirectly profit from it, by allowing criminals to insure themselves from adverse consequences of their own actions.
Commercial Liability Insurance Broad Form Named Insured Endorsement
It is agreed that:
Throughout this policy the words “you” and “your” refer to the Named Insured shown in the
Declarations and any business entity incorporated or organized under the laws of the United
States of America (including any State thereof), its territories or possessions or Canada (including
any Province thereof) in which the Named Insured shown in the Declarations owns, during the
policy period, an interest of more than 50 percent. If other valid and collectible insurance is
available to any business entity covered by this policy solely by reason of ownership by the
Named Insured shown in the Declarations in excess of 50 percent, this insurance is excess over
the other insurance, whether primary, excess, contingent, or on any other basis.
Source: Construction Risk Management, copyright International Risk Management Institute
Our brokers, agents and companies help identify potential gaps in (CGL) coverage’s like
- explaining why a company might add an employee benefits liability (EBL) endorsement to the
firm’s CGL policy and why the firm’s risk manager might have concerns about a retroactive
date and an extended reporting period (ERP), even though the CGL is an occurrence policy; - explaining the scope of coverage afforded to joint ventures and newly acquired organizations
under CGL policies; - identifying the steps necessary to comply with contractual requirements of additional insured
status; - properly evaluate the coverage available under a CGL policy for professional liability
exposures; - identify the proper coverage for injury to a leased worker;
- avoiding contractual liability coverage gaps in connection with work on or near railroad
property; and - recognize electronic data liability exposures and explain the coverage’s available to insure
It should be noted that crime is not uninsurable per se in Commercial Liability Insurance. In contrast to liability insurance, it is possible to obtain loss insurance to compensate one’s losses as the victim of a crime.
A “retroactive date” is a date cited in a claims-made policy or endorsement. When such a date is
applicable, the policy or endorsement will not cover injuries or damage if the specified trigger of
coverage occurred prior to the specified date. Those injuries or damage is excluded even if the claim is first made during the policy period.
Commercial Insurance Near Me offers commercial insurance options custom designed to insure your business in case of employee injuries, accidents, property damage, legal liability, business auto, employee-related risks, loss prevention and more.