Commercial General Liability (CGL)

This coverage protects businesses from claims arising from alleged bodily injury, personal injury, or property damage liability arising out of operations. It includes protection for civil suits arising from services rendered, products sold or operations in general including coverage for accidents occurring in and around premises owned or occupied by the Insured. Coverage payments include judgments, attorney fees, court costs, or other related expenses.

General liability insurance covers its Insured’s for: “those sums that the insured becomes legally obligated to pay as compensatory damages because of “bodily injury” or “property damage” to which this insurance applies.”

Some of the causes of action out of which legal obligations for property damage, bodily injury and personal injury arise are as follows:

  • Negligence – Not only are people responsible for the intentional harm they cause, but their failure to act as a reasonable person would be expected to act in similar circumstances (i.e. “negligence”) will also give rise to compensation. Negligence, if it causes injury to another, can give rise to a liability suit under tort. Negligence is always assessed having regards to the circumstances and to the standard of care which would reasonably be expected of a person in similar circumstances. Everybody has a duty to ensure that their actions do not cause harm to others.
  • Gross negligence – Between negligence and the intentional act there lies yet another, more serious type of negligence which is called gross negligence. Gross negligence is any action or an omission in reckless disregard of the consequences to the safety or property of another. (depends on the circumstance whether it would be covered).
  • Absolute liability – A type of liability that arises from extremely dangerous operations. An example would be in the use of explosives: A contractor would almost certainly be liable for damages caused by vibrations of the earth following an explosive detonation. With absolute liability it is usually not necessary for a claimant to establish that the operation is dangerous. See also Strict Liability.
  • Strict liability – Usually used when referring to Products coverage. The liability that manufacturers and merchandisers may be subject to for defective products sold by them, regardless of fault or negligence. A claimant must prove that the product is defective and therefore unreasonably dangerous. See also Absolute Liability
  • Vicarious liability – When a person is held responsible for the tort of another even though the person being held responsible may not have done anything wrong. This is often the case with employers who are held vicariously liable for the damages caused by their employees. Liability assumed by the insured under contract refers to liability incurred when one promises to indemnify or hold harmless another. It does not refer to liability that results from breach of contract, which is generally uninsurable.
  • Trespass to persons or to property – Unlawful interference with another’s person, property or rights. Theoretically, all torts are trespasses.
  • Nuisance – Excessive or unlawful use of one’s property to the extent of unreasonable annoyance or inconvenience to a neighbour or to the public. Nuisance is a tort
  • Statutory Liability – The written laws approved by legislatures, parliaments or houses of assembly (i.e., politicians). Also known as “legislation” provided that the legal obligation imposed by statute relates to a covered event, i.e. property damage or personal / bodily injury. Statutory Liability can be related to Directors & Officers Liability and similar coverages in respect to source deductions, taxes, unpaid wages, severance and termination pay, and corporate law, or it can related to Environmental Liability flowing from environmental law or to CGL type exposures as with the Occupiers Liability Acts and Innkeepers Acts.

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