Understanding Commercial General Liability Insurance (CGL) ISO OCCURRENCE FORM CG 00 01 (10-01)

Coverage A. Bodily Injury and Property Damage Liability

The insuring agreement obligates the insurer to pay those sums that the insured becomes “legally obligated” to pay as a result of “bodily injury” or “property damage” to which the insurance applies. Today, even small mishaps can result in large lawsuits. Liability insurance protects the assets of a business when it is sued for something it did or didn’t do which caused “bodily injury” or “property damage”. If operating as a sole proprietor, your personal assets and business assets are one in the same and even if operating as a corporation or LLC, this does not totally guarantee that your personal assets are not exposed in a suit. An important benefit stated in the insuring agreement is the insurance company’s duty to defend suits. Although not stated, in regards to allegations or suits that are groundless, false, or fraudulent, the reference to “Any Suits” in the policy form provides the benefit of legal defense against such suits as well as against valid ones. Also related to the insurer’s promise to defend any suit is the right of the insurer to investigate and settle claims. The peril faced is negligence. The hazard exits because of what you do as well as owning or leasing of premises, sale of products, manufacturing products from raw materials, professional activities, and so forth. This is only a short summary and a review of your policy is recommended. There are also standard exclusions to the coverage as addressed in the policy form.

Coverage B. Personal and Advertising Injury Liability

“Personal Injury” means injury, other than “bodily injury”, arising out of:

• False arrest, detention, and imprisonment
• Malicious prosecution
• Wrongful entry or eviction
• Libel or slander
• Oral or written publication of material that violates a person’s right of privacy.

• Oral or written publication that slanders or libels a person or organization or disparages a person’s or organization’s goods, products, or services.
• Oral or written publication of material that violates a person’s right of privacy.
• Misappropriation of advertising ideas or style of doing business.
• Infringement of copyright, title, or slogan.

This is a only a short summary and a review your policy is recommended. There are also standard exclusions to the coverage as addressed in the policy form.

Coverage C. Medical Payments

Medical payments provides payment for medical expenses for bodily injury caused by an accident on premises owned or rented or because if your operations. Payment is made regardless of fault.

There are additional sections of the policy that are important that you should review including but not limited to:

• Who is an Insured
• Limits of Insurance
• Conditions
• Supplement Payments
• Fire Damage
• Standard Exclusions

IMPORTANT INFORMATION:

If a guide is an employee, he/she is by definition an insured in the commercial general liability coverage form. If any guide is subcontracted for employment and not an employee then he/she is not an insured by definition in the coverage form. Exactly how is the named insured affected if there is a bodily injury claim due to the negligence of the guide (employee) versus the guide (subcontractor)? The named insured always has coverage regardless of whether the guide is an employee or a subcontractor. Also the guide (employee) is covered under the named insured’s CGL policy, but the guide (subcontractor) is never extended coverage. The only means for the guide (subcontractor) to have liability coverage is to purchase his own CGL policy. Often there is a misconception that a guide (subcontractor) is extended coverage, but that is not true due to the definition of ‘Who is an insured’! The CGL form simply does not extend coverage to the guide (subcontractor).

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