Businessman showing office policies document

Understanding Commercial General Liability Policies

The Parzivand Law Firm, PLLC Jan. 30, 2024

As a business owner, you're well aware of the potential legal and financial risks that can arise from daily operations. It's crucial to have an understanding of Commercial General Liability Policies, the protection they offer, and how they function. The Parzivand Law Firm, PLLC, based in Stafford, Texas, and serving clients throughout Sugar Land and Fort Bend County, is ready to assist with your Commercial General Liability concerns. The firm's attorney can help you understand and deal with insurance claims to help you receive the coverage you deserve.  

What Is Commercial General Liability Insurance? 

Commercial General Liability Insurance (CGL) is a type of policy designed specifically for businesses. It's there to protect against claims of bodily injury, property damage, and personal injury that may occur during business operations. CGL provides coverage against potential lawsuits and financial losses resulting from accidents or negligence. Understanding this form of insurance is key to making sure that your business has the adequate protection it needs. 

Types of Liability Coverage 

There are two primary types of Commercial General Liability Insurance policies: Claims-Made Policy and Occurrence Policy.  

Claims-Made Policy 

A Claims-Made Policy is one that provides coverage for claims made and reported during the policy period. This means that the claim must be filed while the policy is active, regardless of when the incident occurred. It's essential for businesses to be aware of the specific terms and conditions of their Claims-Made Policy to ensure they report claims promptly. 

Occurrence Policy 

An Occurrence Policy, on the other hand, provides coverage for claims that arise from incidents that occur during the policy period, regardless of when the claim is filed. This type of policy offers broader coverage as it covers claims even if they are reported after the policy has expired or been canceled. 

What Is Generally Covered/Not Covered? 

Commercial General Liability Insurance typically covers three types of claims:  

  • Bodily Injury and Property Damage Liability: This covers legal liability that may arise if your business operations cause bodily harm or physical damage to another person's property. 

  • Personal and Advertising Injury: This protects against legal liability arising from offenses such as false arrest, wrongful eviction, slander, libel, or copyright infringement in your advertisements. 

  • Medical Payments: This provides coverage for medical costs associated with bodily injuries sustained by people in your business premises or due to your operations. 

Despite its extensive coverage, Commercial General Liability Insurance does not cover everything. Some of the exclusions typically include: 

  • Employee Injuries: Injuries to your own employees are not covered under a CGL policy. These are typically covered by workers' compensation insurance. 

  • Professional Mistakes: Errors in professional services or advice given by your business aren't covered. Professional liability insurance is designed to cover these types of claims. 

  • Intentional Acts: Any harm or damage caused intentionally by your business is not covered. 

  • Damage to Your Own Property: CGL insurance does not cover damage to property owned, used, or in the care of your business. Property insurance is required for these concerns. 

Remember that while this insurance provides extensive coverage, it does not protect against all risks. For complete protection, consider combining it with other relevant insurance policies like workers' compensation and professional liability insurance. 

Commercial General Liability Claim Denials 

Common reasons for denials of Commercial General Liability Insurance claims include: 

  • Policy Exclusions: These are specific situations or actions that are not covered by your insurance policy. For instance, intentional acts that cause harm or damage, contractual liabilities, or workmanship issues are typically excluded from coverage. If a claim is denied due to a policy exclusion, it may be necessary to reassess your coverage and consider acquiring additional policies that cover these exclusions. 

  • Lapsed Coverage: If your policy has lapsed or been canceled due to non-payment of premiums, any claims made during this period will be denied. It's critical to ensure that your premiums are paid on time to avoid a lapse in coverage. If a claim is denied due to lapsed coverage, you may need to pay out of pocket for any losses or damages. 

  • Late Reporting: If a claim is reported to the insurer too late, it may be denied, especially in the case of a Claims-Made Policy. Regularly reviewing your policy and promptly reporting any incidents that could potentially lead to a claim can help avoid this scenario.  

  • Misrepresentation of Facts: If the insurance company discovers inaccuracies or misrepresentations in your application or in the claim submission, it may lead to a denial. It's imperative to provide accurate and complete information when applying for insurance and filing a claim. Prevention is the best approach, so make sure to always be truthful and thorough when submitting information to your insurer. 

When a Commercial General Liability claim is denied, businesses must seek legal assistance immediately to explore their options. A knowledgeable business law attorney can review the policy, assess the denial reasons, and determine the best course of action. This often involves filing a lawsuit against the insurance company to challenge the denial and seek the rightful coverage. 

Navigating Commercial General Liability Policies With Confidence 

With the right guidance, you can confidently handle these policies and ensure your business is adequately protected. Don't let a denied claim disrupt your business operations. Reach out to The Parzivand Law Firm, PLLC, today, and let them guide you through this complex situation. Remember, understanding your Commercial General Liability Insurance is key to protecting your business.