The Purpose of a CGL Insurance Policy
Commercial general liability insurance coverage responds when a company is sued. When a lawsuit is filed, CGL steps in to defend the company against the suit and pays for any settlement or court award. A typical CGL policy provides protection against five types of claims.
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Property Damage
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The most common claims made under a CGL policy occur when an employee causes damage to a third party's property. Common property damage claims include situations where an employee breaks an expensive antique while on a service call or drops a tool on a car parked below.
Bodily Injury
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Bodily injury claims occur when a third party is injured due to negligence of the company or its employees. The most common bodily injury claim occurs when a customer slips and falls on a wet floor or when an employee drops a tool onto a passers-by at a work site.
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Personal Injury
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Personal injury claims respond when a third party feels his personal character, reputation and position in the community has been damaged by the spoken or written statements of the company or an employee of the company. These libel and slander suits are often long and arduous, with defending the company regularly costing more than the claim itself.
Medical Payments
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Occasionally, the best defense is a proactive response, and medial payment coverage is designed to influence that maxim. If a third party suffers bodily injury caused by possible negligence, medical payment coverage will voluntarily pay expenses, such as medical bills, ambulance services and medications, even if a lawsuit is never initiated.
Tenant's Legal Liability
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If a company rents its place of business, tenant's legal liability responds if the actions of the organization causes damage to the building. This could be the result of an overflowing toilet that causes damage to the structure, or a small fire that causes the overhead sprinklers to activate.
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References
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