Commercial insurance comes with more options than personal insurance because there are more risks associated with running a business than running your own life.
Each option is referred to as a “coverage part.” The coverage parts can be purchased mono line, meaning individually, or as part of a package policy, where at least two parts are combined.
Commercial General Liability, referred to as CGL, is the liability coverage option for businesses both large and small.
A CGL will provide insurance for bodily injury and property damage you cause to others. As with other insurance policies, it is broken down into sections, in this case, parts A, B and C.
Coverage part A of the CGL deals with bodily injury (BI) and property damage (PD) you cause to others. This coverage is more expansive than a personal auto policy in that it insures the policyholder against BI and PD resulting from premises and operations, as well as products and completed operations.
Coverage Part B of the CGL insures against personal and advertising injury. Personal injury is NOT insurance for BI and PD liability, rather the liability for financial damages that result from libel, slander, wrongful eviction or false arrest, or violating one’s right to privacy. Advertising injury may result from making false claims about the effectiveness of a product or services.
Coverage C, medical payments to others, is designed as a no fault coverage that doesn’t deal with liability. This means no fault has to be proven in order to claim for damages. Similar to medical payments on a homeowner’s policy, payments for medical services can be made to people other than the insured or employees. Remember, employees are always covered by workers compensation insurance.
Remember that the CGL is just the liability portion of every commercial package policy (CPP). The most common CPP is the Business Owner’s Policy (BOP), which incorporates the CGL with a type of business property and content coverage in a standardized policy designed for small businesses.
Contact your insurer or independent agent if you own a business and have specific coverage questions or are thinking about starting a business, and need assistance deciding what coverage will be necessary to be properly insured against all risks.