Regardless of what kind of business you own, a commercial general liability policy is beneficial to have. A CGL policy exists to protect business owners from a variety of extremely expensive claims. In fact, liability insurance is considered to be so important that it is considered the foundation policy for business insurance coverage policies. While CGL covers a wide variety of damages, it is important to know what the policy will often not cover.
Here are 7 types of claims that you shouldn’t expect your GL policy to cover:
#1 Intentional Damage
A CGL policy generally covers third-party damages. But not every third-party damage scenario is covered. If you (or one of your employees) get hot under the collar and sets out to intentionally damage someone else’s property, don’t expect your GL policy to cover it.
Normally, if an employee damages someone else’s property it would be covered under a general liability policy, but most GL coverage excludes intentional damage. This means that something done in the heat of the moment can be a costly mistake that may not be covered under your policy.
#2 Injured Employees
Injuries to customers are usually covered in general liability insurance because they are considered to be third-party injuries. But injuries to your employees are not considered to be third-party and are typically not covered by your general liability policy.
This is why it is always important to have workers’ compensation insurance in addition to your general liability insurance. Most states require workers’ comp if you have employees, but even if it is not mandatory in your state, it is always better to have.
#3 Damaging Your Own Property
CGL coverage does cover property damage, but this is only applicable in certain types of situations. General liability is designed to protect your from third-party lawsuits, and that means that it generally only covers damage to people external to the company, such as customers.
This means that if your employee intentionally or accidentally damages your property, your CGL policy typically won’t cover it.
#4 Vehicle Coverage
General liability policies tend to exclude commercial vehicles, whether it’s a personal vehicle used for work or a fleet of trucks or cars. No matter what kind of purpose your vehicles perform for your business, they are generally not going to be covered under the CGL.
If you have vehicles that are part of your company’s operations, it is critical that you have commercial auto insurance to cover any potential accidents.
#5 Any Type of Pollution
A standard general liability policy typically excludes nearly all types of pollution. No matter what kind of pollution your company could potentially be risking it will likely not be covered. Pollutants can include any irritant or contaminant, including soot, smoke, vapors, fumes, chemicals, waste, and more.
The wide range of possible pollutants and the cost of being liable for them makes having pollution insurance a smart choice for many companies.
#6 Cyber Attacks
A relatively newer type of problem that companies can run into is hacking. These kinds of cyber attacks are usually not covered under CGL policies. While many companies think that lacking this specific type of coverage is acceptable since they are not specifically tech related, most companies can benefit from this kind of policy.
Any company that stores customer information, credit card numbers, or other sensitive data can suffer greatly from being hacked. Supplementing CGL with cyber coverage can help prevent expensive problems in the event of an attack.
#7 Professional Mistakes
Poor workmanship or lawsuits over improper advice are generally not covered under a CGL policy. These kinds of professional errors have to be covered by professional liability insurance.
Often, these kinds of professional errors can be costly, and it is best to have supplementary coverage in case this kind of unfortunate event occurs.
While commercial general liability insurance protects you from a wide range of lawsuits and problems, there are some occurrences that it cannot help mitigate. Understanding that the CGL coverage is generally focused on protecting you from damages to a third-party can often help you understand what supplementary coverage you need to run your business.