What does a Commercial General Liability policy cover?

A Commercial General Liability (CGL) policy is specifically designed to protect businesses from various liability claims that may arise in the course of their operations. This type of insurance provides coverage for claims involving bodily injury, property damage, personal injury, and advertising injury that occur on the business premises or as a result of the business operations.

The CGL policy is essential for businesses as it helps cover legal costs and potential settlements or judgments that may arise from lawsuits filed against the business for incidents that fall under the policy’s coverage terms. This is crucial for safeguarding the financial stability of the business and ensuring it can continue operating effectively despite facing liability claims.

In contrast, property damage alone would not encompass the full range of liabilities that a business might encounter, as claims can involve bodily injury and personal injury. Coverage for personal property of the insured also falls outside the scope of a CGL policy, as it typically pertains to property insurance. Employee injuries on the job are generally covered by workers' compensation insurance, not by a CGL policy, which focuses specifically on liability claims. Therefore, recognizing the comprehensive nature of the coverage under a Commercial General Liability policy clarifies why liability claims against a business represent the correct understanding of what such a policy covers.