What Liabilities Are Addressed Under Commercial General Liability Insurance?


Running a business is like painting a canvas. Every stroke of the brush has a different effect depending on the artist’s skills. The success of every business depends on decisions made in its management. Although business organisations have different goals and objectives, they face some common issues;the problem of liability.

Since organisations involve different stakeholers, there might be situations where liability might arise. How do you prepare for such unexpected liabilities? How do you prepare your business to tackle these liabilities? Well, commercial insurance is the answer!

Commercial insurance is a form of liability insurance that protects business owners against the defence cost and other legal hassles that can occur due to claims by third-party or its product or services. All businesses face this kind of risk. Say, for example, your client visits your premises and gets injured, they may sue you for damages. Also, customers may file claims for damages faced by your product. These claims involve not only lawsuits, but also an impact on your business’ finances. Using a liability insurance, all these liabilities can be protected from your business. 

What does commercial general liability insurance cover?

Commercial general liability insurance includes the cost of litigation along with any settlements for third-party injury or property damage that may be required in the case. Further, it provides coverage for product liabilities too. Using a commercial liability cover, it can help your business reduce the cost of legal liabilities which are unexpected and arise at most inopportune times. 

Who should purchase commercial general liability insurance?

Every business requires a commercial insurance cover. The risks for each category of business may differ from others. Not only business but professionals rendering services like consultancy firms, medical establishments also need one. Thus, regardless of the size and nature of the organisation, business owners should buy a commercial insurance cover. 

Which liability is covered under a commercial general insurance? 

The following liabilities are covered under a commercial insurance cover – 

  • Any third-party damage to property or bodily injury occurring at the location of the insured organisation is covered by the public liability offered under commercial insurance. It insures the organisations against any legal fees and settlement charges. You must note that your employees and your property do not fall under the purview of third-party coverage. 
  • Any losses to the organisation due to infringement of copyright or trademark is covered under this insurance. 
  • Medical payments required to compensate a person who suffers injuries on your premises is included under commercial insurance cover. This injury may be sustained in the regular course of business or due to an accident. 
  • Any legal expenses incurred and legal assistance is provided by your insurance company if you avail a commercial insurance plan. 

What is excluded from your commercial insurance policy?

The following situations are excluded from your commercial liability insurance – 

  1. War and perils.
  2. Any intentional damage.
  3. Professional negligence on the part of the insured.
  4. Contractual liabilities are excluded from your insurance cover.
  5. Punitive damages. 
  6. Compensation for workmen under prevalent laws.
  7. Wilful non-compliance of statutory regulations. 

While it is crucial to avail a commercial insurance policy for your business, it is equally important that you read the fine print before finalising. The scale of operations determines the amount of policy coverage you should opt for. Also, do not forget to evaluate at each during the offline / online policy renewal process for any changes required in the policy depending on the risk for businesses.