Workers’ Compensation and Employer’s Liability Are Excluded Coverage from Commercial General Liability
by Ed Sneneh, Commercial General Liability Specialist
Work Related Injuries: Commercial General Liability, known as CGL, provides businesses and their officers and owners. Commercial general liability came to replace an older concept , comprehensive general liability, an insurance coverage that was sold to business till late 1980s. CGL provides coverages on the business premises, business operations, products & completed operations; as well as Personal & Advertising injury. It is clear that the CGL policy does not cover everything, and their are many liability exposures that are specifically excluded from CGL. One of these main and important exclusion is related to liability arising from lawsuits brought against employees by own employees.
Liquor Exclusion. CGL specifically states that it will not cover any bodily injury or property damage caused by someone intoxicated why purchased liquor from the business. For that reason, liquor stores, restaurants serving alcoholic beverages, and taverns and night clubs, must purchase a liquor liability policy before the State provides them with the license.
Care, Custody or Control Exclusions. Commercial General Liability insurance is made to provide cover against “third party” exposures. The exclusion applies to damages to property used, owned or leased to the insure or the property that is in the 'care, custody or control'. This applies too to the insured or property on which the insured had control over. Example: XYZ Corp is a mechanic shop located on Main Street. Because of high wind the outdoor sign of the business broke down and landed on a vehicle parking underneath the sign. If the vehicle is owned by the insured business then there business insurance will not offer any coverage. If the destroyed vehicle belongs to a customer who brought the vehicle for repair at XYZ then there will be no coverage under the CGL (it could be covered under garagekeepers liability). If the vehicle is owned by a total stranger who just legally park their vehicle in that place then CGL will kick in and will cover the loss. This is similar to bailee coverage which is also excluded (Example: Customers clothes left at dry cleaners are not covered under CGL, and they need Bailee Coverage.)
Auto Liability on any auto, owned, hired or no owned, is excluded from CGL. Special coverages may be purchased based on the needs of the business.
X, C and U Exclusions, or Exclusion of Explosion, Collapse and Underground
CGL specifically exclude certain losses resulting from explosion, collapse and underground activities. These coverages can be crtical to certain construction contracts. Customers may ask to remove them from exclusion by endorsement (will cost more.)
War. Liability claims caused by acts of wars, declared or not, are not covered under liability policy.