Posts|February 24, 2021
The Basics, Part 2: General Liability
By Preston Cavignac
Principal CPCU, CIC, CRM
In this series we look at specific insurance policies and concisely explain how they work.
Who does it protect?
- General Liability (GL) policies protect your company, its owners and employees and volunteer workers (while performing duties related to the conduct of your business)
What coverages does it offer?
- A General Liability policy covers you from 3rd party bodily injury or property damage arising out of your premises, operation, products or completed products. Said another way, the GL policy will cover you if someone outside your company (person or company) files a claim alleging your company has somehow damaged their property or caused them bodily injury. General Liability also offers some ancillary coverages, like Personal and Advertising Injury, among others.
Who could bring a claim?
- Anyone outside your company and its employees could technically bring a claim. Vendors, clients, individuals, homeowners, other businesses, etc.
Why would they bring a claim?
- A claimant would bring a claim if they felt that your operation somehow caused them bodily injury or property damage.
When should you submit a claim?
- The standard GL form requires you to submit a claim “as soon as practicable” once you are aware of an occurrence or offense which may result in a claim.
What are some claims examples?
- Premises Claims – Vendor is on your property, slips and falls and files a claim for bodily injury.
- Operation Claims – Contractor is painting your house. It is a windy day. The paint sprays a few vehicles behind the house. Owners of the vehicles claim property damage arising out of your operation.
- Product Claims – An individual buys your product, then gets injured using your product alleging it was defective in some way which led to their injury. They file a claim for bodily injury.
- Completed Operations – Contractor builds a house. The foundation is constructed incorrectly by a subcontractor. As a result, the foundation shifts and causes damage to the structure of the home. Homeowner files a claim for property damage.
Any specifics to be aware of?
- Most policies are constructed using some version of the Insurance Services Office (ISO) coverage form CG 0001. This is the standard GL form. Then there are a number of endorsements that amend coverage off this form. All endorsements will need to be reviewed to make sure that no key coverages are stripped away. Key coverages, specific forms and endorsements will apply differently to different business (all business have different exposures to risk).
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