Posted on May 19, 2014

Understanding Your Commercial Liability Insurance Policy

Commercial insurance policies are comprehensive in nature so that businesses can be fully protected for a variety of losses including fire, theft, flood, bodily injury and property damage. One of the main sources of insurance protection for businesses is the commercial general liability policy. This coverage protects company assets from lawsuits and judgments that would otherwise financially devastate business operations.

Having an understanding of the various sections of your commercial general liability coverage is one of the first steps in ensuring that the insurance is doing what it is supposed to do ? protecting your assets. General liability insurance policies have three sections labeled in alphabetical order: A, B and C.


General Liability Coverage A ? Bodily Injury and Property Damages

Section A of liability policies is in place to pay for any costs the insured company becomes legally responsible for because of injuries, damage to property of others or products & completed operations. This important coverage also pays for legal costs to defend business owners from damages.

Within this section there are two types of policy limits: occurrence and aggregate. The occurrence limit defines the amount the insurance carrier will pay for damages for a single event or occurrence; whereas, the aggregate limit is the total amount paid for every claim made during a policy period.

Specific exclusions exist that are standardized within general liability coverage, and these include vehicles (auto, water or aircraft), pollution, workers compensation insurance, intended injuries and product recalls.


Business Liability Insurance Coverage B ? Personal & Advertising Injury Liability

Section B of business liability policies explain that the insurance carrier will pay for any damages associated with personal or advertising injuries. The limits are usually the same as occurrence limits in Coverage A of the policy. Examples of Section B coverage include copyright infringement, libel, slander and false arrest.


Commercial General Liability Coverage C ? Medical Payments

Section C pays for any medical expenses that a business owner is legally required to pay for parties injured on company premises or as a result of business operations. Limits for medical payments are much smaller than for Coverage A or B. Traditionally most policies have a policy limit of $5,000, but these limits can be increased by special endorsement and extra premium payment.

When shopping for commercial general liability insurance, business owners should make sure that the coverage limits will fully protect the assets of the business and make sure to customize the coverage to include specific areas of need not found in standard liability policies. General liability insurance allows business owners to relax with the knowledge that when an unexpected misfortune turns into a claim, their insurance carrier will take care of handling the claims paperwork and any costs associated with the injury or damage.

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