Commerial General Liability
Protecting Your Business in a Nutshell!
I will preface this article with my philosophy that people should not make themselves 'insurance poor'; rather, carry adequate insurance and also employ risk management techniques to mitigate risk exposure as much as possible.
To begin with, you are building a business and we are familiar with that process and know that it is not easy and it takes a great deal of time. We are becoming a litigious society. Claims are most certainly on the rise in Canada, due to people looking to recover through litigation. Claim amounts are also increasing as people are pursuing higher settlements. There are countless unfortunate situations where a single claim can spell the demise of an improperly protected business. Legal expense is an ever-increasing cost in settling claims. These costs are incurred and covered even if a claim against you seems groundless.
Coverage afforded by a CGL policy:
Coverage extends to you, your spouse, partners, and employees only in the course of your business.
This coverage is offered to protect you against damage to a third party's physical property. This could be as simple as having a glass of red wine with a client and spilling it on their carpet requiring a complete re-carpeting of the home. There are situations where a claim will exceed the intrinsic value of the damaged item based on rarity, sentimental value (such as a family heirloom) or other extenuating circumstance. In the case of the carpet, you would not only be looking at the value of the carpet, but the cost to remove the old carpet, install the new carpet and costs for any materials required for installation.
Coverage against bodily injury to a third party in the course of business. Again, this isn't simply the 'slip and fall' coverage while patrons are at your premises. It covers you and employees while off premises and you inadvertently hurt someone while in the course of business. Often it seems that these would be minor, but one should give consideration to the possibility of medical bills, lost pay if your client is self employed and loses time away from business, and of course legal fees to settle a suit/claim.
- Personal Injury / Advertising Injury Liability
This coverage protects you against injury you may cause to another through advertising or other marketing activities. It is not designed to protect you against false advertising. But, in the event that you published information about a client on your web site for example, and this in some way had a damaging affect on their business, whether from a sales or reputation standpoint, they could pursue damages against you.
This provides coverage for damage to a premise you lease or occupy which belongs to a third party. For example, if a fire broke out in your office and damaged the building you occupy, this coverage would apply to the repair or restoration of the portion on the building you occupy. The building owner's property coverage would apply to the portion they occupy but not the leased space and they would look to recover from the tenants legal liability coverage on your policy.
Most CGL wordings will provide coverage or the option of coverage for injury that may occur to an employee, over and above the coverage afforded by worker's compensation.
We have also seen a trend toward Designers being required to produce evidence of a CGL policy for RFP's. In this respect, one could spin this coverage into a sales feature when competing against other Design firms for projects. By offering evidence of this insurance to a prospect, you are essentially reducing their risk exposure.
It protects the business you are building, it offers you peace of mind, it offers your clients peace of mind and it enhances your image as a good corporate citizen.
Jason Cain is a Commercial Account Executive with Mumby Insurance Brokers Inc. He can be contacted at 1-800-446-5745.
** The information provided herein in intended to provide general information and not to replace the professional advice of your insurance broker. Should you have questions pertaining to your specific needs, please contact our office