Commercial General Liability Insurance Exclusions

The name Commercial General Liability (CGL) insurance can be misleading because it makes it sound as if it covers all liabilities your business may face. However, each type of CGL coverage does have its exclusion just like other lines of business insurance, and they include the following:

Coverage A

If your commercial operations cause bodily injury or property damage to others, then it is the Coverage A section of your CGL that will come to your rescue. The coverage will help by providing legal and financial protection, but not for excluded risks such as these two:

Product Liability: This is the legal liability associated with manufacturing or selling a defective product that causes injury to property damage. For example, if you sell exploding cellphone batteries, injured customers may sue you based on product liability laws.

Transportation Liability: Transportation liability applies when goods you are transporting or carriers (such as boats or cars) transporting your good cause injuries or property damage to third parties. A fitting example is if an improperly secured load falls from a truck onto a pedestrian.  

Coverage B

This coverage protects you from claims or lawsuits related to advertising or personal injury. This is the coverage you need if, say, you are accused of committing a false arrest. Again, it does have its exclusions, which include:

Breach of Contract: This claim arises if you enter into a contract with another person and fails to hold up your part of the bargain. For example, you may face a breach of contract claim if you were to supply chairs and tents to a wedding but failed to do so.

Identity Theft: Coverage B won't come to your rescue if you are accused of impersonating someone. For example, if you are being accused of impersonating a government official, Coverage B won't pay for your legal defense or compensate you for the associated financial losses.

Coverage C

This section of your CGL pays for the medical expenses of those who get injured on your property. Just as you would expect, it also has its exclusions that include:

Tenant or Employee Injury: If one of your employees gets injured on your premises, Coverage B won't pay for their medical expenses. The same is true if one of the tenants leasing your commercial property gets injured.

Sports Injury: Lastly, don't expect Coverage B to settle medical expenses for an injury incurred by a person who was engaged in a sporting activity at the time of the accident. for example, if someone injures themselves while doing lunges or playing basketball on your property, your Coverage B won't settle their medical bills.