A commercial general liability (CGL) policy is intended to provide protection against financial losses involving personal or property damage. With negligence, CGL policies cover what’s referred to as “non-professional” negligent acts. Below, we take a moment to explain what this means so you can have a better idea of how to manage your coverage needs.
What a Commercial General Liability Policy Covers
A standard commercial general liability policy typically covers your applicable legal and medical expenses related to damages if you’re considered liable for certain types of injuries or accidents. This coverage is limited to your specific policy limits and typically doesn’t cover anything that exceeds your limits. Whether or not you’ll be protected financially with this type of policy also depends on the nature of the negligence.
Bodily Injury/Property Damage Liability
This is the part of a CGL policy that applies to losses related to legal liabilities for bodily injuries and/or property damage. As mentioned above, this applies to non-professional negligent acts. Such acts must be related to your premises or business operations—meaning the negligent act must have occurred on your business property.
Defining Non-Professional Negligent Acts
A non-professional negligent act is a type of negligence not related to professional services affecting a third party not on your payroll. For instance, you would be covered if you were sued by a customer who was burned by a cup of hot tea or coffee that was made too hot to be safely handled. This also applies to situations involving:
• Customers who slip and fall on your property
• Clients or customers injured on your premises due to some type of negligence
• Mental injuries and emotional distress related to customer injuries
If an employee in your accounting department makes a mistake in calculations that ends up costing your business thousands of dollars, this would be considered professional negligence. In this instance, the resulting financial impact wouldn’t be covered by a standard CGL policy.
Commercial General Liability Exclusions
A CGL policy has some exclusions. The most notable one is negligence that affects your own employees while performing work-related duties. Therefore, going with the coffee or tea example from above, if an employee of yours was burned when handling the same excessively hot beverage, commercial general liability coverage wouldn’t apply. In this case, you would need separate workers’ compensation coverage for professional negligence issues of this nature. Other common CGL policy exclusions include:
• Criminal acts
• Intentional damage or injury
• Anything that can be considered professional negligence
If they aren’t sure what’s covered by their business insurance, San Diego business owners should contact their insurance agents to make sure they have the coverage necessary to protect their interests.
Rounding Out Your Coverage to Cover Gaps & Minimize Financial Risks
A commercial general liability policy alone may not cover all your business-related insurance needs. In fact, this is the case for most businesses. This is why it’s important to round out your coverage with workers’ comp and other types of liability coverage appropriate for your needs and potential risks.
If you’re a business owner, make sure to protect your business by purchasing the right insurance coverage. For affordable, reliable business insurance as well as homeowners, renters, motorcycle, and auto insurance, San Diego residents call on the trustworthy professionals at Altra Insurance Services. Reach out to us today at (800) 719-9972 to learn how we can satisfy all your insurance needs.