Coverage Under Commercial General Liability Policies

Business organizations deal with various stakeholders at once. Primary stakeholders include the investors, employees, customers and suppliers. With the growing importance of the concept of corporate social responsibility, the term stakeholders is extended to include community, government and trade associations too. Any entity, whether internal or external to the business, can be deemed to be a stakeholder of the organization. With multiple stakeholders associated with the business at once, any financial liability arising out of a claim can affect the reputation of the business. Moreover, to honor these liabilities can have an adverse impact of the cashflows of the business. To avoid such unexpected pitfalls, a liability insurance cover can come handy, commercial general liability insurance in particular. What is a commercial general liability insurance policy? A commercial general liability insurance is a policy that covers the liabilities that may become payable to its stakeholders due to legal accountabilities. Since every business organization in some form or the other are legally accountable to their stakeholders, this insurance policy acts as a safeguard for its finances. Not only the defense cost, but also other costs of legal recourse can be sought under a commercial insurance plan. For instance, a client visit on your premise resulting in an injury to such person may attract legal damages. Lawsuits aren’t the only impact of such events, but also hamper the business repute. Which type of businesses must purchase a commercial general liability insurance plan? Ideally, all business organizations must invest in a commercial insurance policy. Every business organization faces a different risk and this insurance policy helps to protect against such varying perils. Moreover, a commercial general liability insurance is not limited for business entities, but also can be used by professionals rendering services like consultancy firms, medical establishments, etc. Hence, irrespective of the scale of operations, all entities must buy one. What are the different events covered by a commercial insurance policy? Some of the events that commercial insurance covers is mentioned as below –

• Third-party injury or property damage: Since the benefits of a liability insurance plan can be used to protect against product as well as public liability, third-party damages are included in its scope. Any injury caused to the users of the product as well as other stakeholders is covered by this policy. Not only will it bear the legal liabilities due to such persons, but also cover the cost of medical expenses. Further, any damages caused to the property of such persons because of such products is included in its coverage.

• Intellectual property right claims: Marketing activities might involve infringing intellectual property rights of some third person. A commercial insurance can help manage the legal costs associated with such claims as well as the compensation, if any.

• Quality issues in products: Claims that are raised by the customers against the faulty / defective products can result in deep trouble for the business. With the help of a commercial insurance policy, these kinds of liabilities can be avoided by the enterprise.

• Medical reimbursements: A liability arising on the business to compensate a person that suffered injuries on the premises is included by a commercial insurance cover. These injuries may be sustained in the routine operations of the business or even due to an accident.

These are the instances where a commercial general liability insurance cover can help to protect the business. But even when there is a backup of commercial insurance policy, it does not relieve the organization of its responsibility of taking adequate precautions. Lastly, make sure to read the policy terms thoroughly when buying one. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.