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What Kinds of Injuries Does Commercial Insurance Cover?

The Difference Between Personal and Commercial Car Insurance in Georgia

The following article is the sixth in a series of 9 articles that explain the different concepts involved in insurance policies as they relate to personal injury in automobile accidents.  This article focuses on explaining commercial general liability insurance policies.

Commercial General Liability Insurance

Commercial general liability policies (CGL policies) are insurance policies businesses purchase to protect themselves from claims by third parties, generally customers. These policies protect the businesses from financial losses in situations where the business would be responsible for property damage, personal or advertising injuries caused by the services the business offers, operations by the business or its employees.

Standard CGL policies cover non-professional negligent acts such as:

  • Customer slip and falls or trip and falls
  • An employee in a business’ painting or construction business accidentally leaves the water running, causing substantial damage to a customer’s home
  • Damage claims from a product or menu item the business sells
  • A class action lawsuit filed against a business alleging misleading information in an advertisement the business ran

CGL policies typically provide coverage to pay for the legal defense for the business and pays damages for which the business is found to be responsible up to the monetary limits set by the policy. Standard CGL policies include; Bodily Injury and Property Damage, Personal and Advertising Injury, and Medical Payments.

 

Bodily Injury and Property Damage Liability

This coverage protects the business against losses from the legal liability arising from bodily injury or property damages to others for non-professional negligent acts or for property damage, personal or advertising injuries caused by the services the business offers, operations by the business or its employees. Mental injuries and emotional distress, even in the absence of physical injury, are typically covered.

 

Personal and Advertising Injury

This protection covers liability against certain offenses, including:

  • Libel
  • Slander
  • False arrest
  • Copyright infringement
  • Malicious prosecution
  • Using someone’s else’s advertising idea
  • Wrongful eviction, entry or invasion of privacy

 

Medical Payments

Payments for medical treatments for injuries to a customer on the business’ premises or due to the business’ operations are usually covered. These payments are often covered even without a legal claim being filed. This allows small claims to be settled without the need for a lawsuit. This coverage typically pays for all reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations. This provision of the CGL does not usually cover legal defense funds as it is provided on a no-fault basis.

The policy language and contract terms use standard form language from the Insurance Services Office to draft their policy language. CGLs and common automobile policies contain similar provisions for coverage. In cases involving CGL claims, courts review the policy terms and language, paying close attention to the definitions and exclusions, just as they do in cases involving personal automobile insurance policies.

CGLs can be costly. One method some companies use to reduce those costs are to self-insure themselves up to a certain dollar amount. This means the company has a self-insured retention (SIR), meaning it has contractually obligated itself to defend itself for claims up to a specific dollar value. Larger businesses might set that limit at $1 million, for example. The SIR works similarly to a deductible for first-party claims, such as in collisions, except the company is also agreeing to share in some of the legal risks in the event of a claim. The difference in automobile policies are that owners are generally protected from legal liability.

Conclusion

Business insurance provides much more flexibility and protection compared to a personal insurance policy.  To continue learning about insurance coverage in Georgia, here are the titles and links to all the articles in this series:

 

  1. When Can I Recover from Someone’s Else’s Insurance?
  2. The Declarations Page
  3. Duty to Defend
  4. Reservation of Rights
  5. Bad Faith
  6. Commercial General Liability (this article)
  7. Direct Actions Against Insurance Companies
  8. Uninsured Motorists
  9. Underinsured Motorists

 

 

 

 

 

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