<\/p>\n
Many small businesses have a Commercial General Liability policy (which I will now call a \u201cCGL\u201d to save my fingers all the extra typing work) because someone made them get it. \u00a0A sandwich shop\u00a0is leasing a space in a shopping center\u00a0and the landlord said it needs to have CGL. \u00a0An electrician scored a contract to install the electrical system in a commercial tenant improvement project and the general contractor said he needs to have it.<\/p>\n
And so, \u201cFine,\u201d says the sandwich shop and the electrician, \u201cI\u2019ll get it the CGL in order to satisfy the contract,\u201d treats it as another annoying business expense, and then moves on with the thing he\u2019s\u00a0good at: satiating hungry lunch-goers\u00a0and making buildings light up.<\/p>\n
The policy\u00a0comes in the mail and since it doesn\u2019t say any money is owed at this point, it gets moved to the \u201cimportant but not urgent\u201d stack for a few months before it eventually gets put in a file cabinet next to the desk a few feet from the stack it once resided. \u00a0And from there, that policy sits and leads a lonely life of sadness in a dark cramped file cabinet. \u00a0Poor policy.<\/p>\n
At some point you may have an incident; something that makes you wonder about your insurance. \u00a0An angry Yelper claiming he\u00a0cracked a tooth on your cheese steak. \u00a0A failure in the light system causing the building lights to not go on causing the business inside the building to cease operations. \u00a0Or maybe you\u2019re just curious about that thing you\u2019re paying for each month. \u00a0Regardless something has piqued your interest and you\u2019re now wondering what this insurance is for.<\/p>\n
This is where I step in. \u00a0I will explain what your insurance is for. \u00a0I\u2019ll do so briefly and in plain English so you can see the Big Picture. \u00a0If you really want to get into the details \u2013 and there are many \u2013 here\u2019s something for you:\u00a0The CG 00 01 04 13, the policy that your CGL policy is or is based on.<\/p>\n
Here we go:<\/p>\n
The primary duty of a CGL policy is to pay for bodily injury and property damage that you are responsible for. \u00a0 This is called\u00a0Coverage A \u2013 Bodily Injury and Property Damage Liability<\/strong>.<\/p>\n What is bodily injury and what is property damage? \u00a0Here are some examples. \u00a0When your customer\u00a0slips, falls, and tears an ACL\u00a0in your restaurant, that\u2019s bodily injury. \u00a0When you install some switches on a switchboard and the switchboard burns up, that\u2019s property damage.<\/p>\n How do you know if you\u2019re responsible for the damage? \u00a0In the examples above, were you really responsible for the slip and fall? \u00a0Did you really cause the switchboard to burn up? \u00a0Maybe. \u00a0Maybe not. \u00a0 Can you call your insurance company and just tell them that someone tore an ACL at your restaurant so they need to pay? \u00a0No. \u00a0First, someone has to accuse you of being responsible before your claim adjusters will pick up the phone. \u00a0The injured sandwich eater has to make a claim against you. \u00a0The owner of the switchboard has to file suit. \u00a0In order for any claims adjuster to dust off your policy and see if there\u2019s going to be any payments, someone has to put it in writing that they suffered bodily injury or property damage and that it\u2019s your fault it happened.<\/p>\n At this point you may be asking: what if someone files a claim against me and I\u2019m not really at fault? \u00a0That\u2019s a great question. \u00a0The answer is: your insurance company will defend you. \u00a0They are your legal team. \u00a0 Your CGL policy pays for defense even when you are merely accused of being at fault.<\/p>\n Coverage for bodily injury and property damage is not just limited to incidents happening on your premise while you are operating your business, as you saw in the examples above. \u00a0 Your policy will cover you for the same types of losses that arise out of your product or your completed operation. \u00a0What does that mean? \u00a0For product liability, let\u2019s say that you are a winery and you sell bottles of wine through a club membership. \u00a0One of your wine club members cuts his finger on your jagged glass bottle. \u00a0That is bodily injury arising out your product. \u00a0We also have completed operations. \u00a0Let\u2019s say you are a plumber and you repaired a plumbing system in an apartment building. \u00a0Six months after you finish the job, the plumbing system begins to leak and trickle water down to the apartments below causing damage to the drywall. \u00a0This is property damage arising out of your completed operations.<\/p>\n There you have it: Coverage A \u2013 protection for you against bodily injury and property damage to others \u2013 is the main thing. \u00a0But in the spirit of being complete, let\u2019s move on to Coverage B and C.<\/p>\n Coverage B \u2013 Personal and Advertising Injury Liability.<\/strong>\u00a0 This part\u00a0covers \u201cinjury\u201d (that is: hurt feelings, being offended, outraged, or appalled, including consequential actual bodily injury) to others that arises out of a specific list of offenses that you and your business caused:<\/p>\n a. False arrest, detention or imprisonment;<\/p>\n b. Malicious prosecution;<\/p>\n c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor<\/p>\n d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person\u2019s or organization\u2019s goods, products or services<\/p>\n e. Oral or written publication, in any manner, of material that violates a person\u2019s right of privacy<\/p>\n f. The use of another\u2019s advertising idea in your \u201cadvertisement\u201d<\/p>\n g. Infringing upon another\u2019s copyright, trade dress or slogan in your \u201cadvertisement\u201d<\/p>\n Coverage B is\u00a0rarely used unless you\u2019re in the printing or publishing business. \u00a0But it could have some application to all types of businesses due to the proliferation of online social media by businesses and its employees. \u00a0For example: your employee writes a scathing Facebook post blasting\u00a0one of your customers. \u00a0You might appreciate the libel coverage Coverage B provides.<\/p>\n Lastly,\u00a0Coverage C \u2013 Medical Payments.<\/strong>\u00a0 This is the coverage that my clients, if they happen to read their policy, storm into my office, slam down their paperwork on my desk and shout, \u201cEli, you said I had a million dollars of coverage for bodily injury, but right here \u2013 see? \u2013 is says \u2018Medical Payments: $5,000! I want my money back!\u201d<\/p>\n OK, no one has ever done that. \u00a0But a few of my clients have politely called with a few questions about what looks like a contradiction on their policy. \u00a0You see, Coverage C is usually limited to somewhere around $5,000 to $10,000 and if you\u2019re not aware of the differences between Coverages A and C, you might be ready to storm your agent\u2019s office too.<\/p>\n Coverage C is a special additional limit of insurance that applies to bodily injury that is caused by an accident on or near your premise or because your operation that is\u00a0not necessarily your fault<\/em>. \u00a0The difference between Coverage A and C is that with Coverage A you have to be at-fault for the policy to pay and Coverage A usually has a much higher amount that can be paid out, like $1,000,000, as opposed to Coverage C that as you saw above has somewhere around $5,000 \u2013 $10,000.<\/p>\n So what is the purpose of this Medical Payments coverage? \u00a0It is to offer quick payment to satisfy minor injury without having to go through the process of proving you were at fault. \u00a0A quick payment that buttons someone\u2019s minor injury up can prevent a much larger lawsuit from happening. \u00a0Medical Payments is like a Band-Aid and a lollipop. \u00a0Feel free to use a different analogy.<\/p>\n There you have it \u2013 the big picture view of your CGL policy. \u00a0Again, this is not all-encompassing. \u00a0There are 7 (out of the 16) pages of Exclusions on a CGL policy which means lots of things can happen that aren\u2019t covered. \u00a0But, lots of things that can happen ARE covered, and it can truly save your business from financial disaster. \u00a0So go ahead, pull that lonely policy out of the file cabinet and have a good read tonight knowing that the payment you make every month is actually doing something good for your business.<\/p>\n","protected":false},"excerpt":{"rendered":" You\u2019re a business owner and you have a Commercial […]<\/p>\n","protected":false},"author":3,"featured_media":3428,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,17,7],"tags":[],"class_list":["post-3427","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-insurance","category-general-liability","category-liability-insurance"],"_links":{"self":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3427","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/comments?post=3427"}],"version-history":[{"count":1,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3427\/revisions"}],"predecessor-version":[{"id":44652,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3427\/revisions\/44652"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media\/3428"}],"wp:attachment":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media?parent=3427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/categories?post=3427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/tags?post=3427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}