Commercial general liability (CGL) Insurance is coverage that protects a business from general liability claims. Typical general liability claims are slip, trip and falls, and much more.
General liability Insurance is often referred to as Commercial General Liability Coverage, or business liability insurance.
“Commercial” basically means business. Some injury claims are excluded from coverage.
A CGL policy will pay damages when the business is legally responsible for bodily injury, property damage, or personal and advertising injury liability.
What types of liability are covered under a CGL?
The most common types of liability that are covered under a CGL policy are: premises and operations liabilities, and products and completed operations exposure.
How many parts are there in a CGL policy?
Three parts. I am just going to focus on two here. Of those two, 99% of personal injury claims involve Part A Coverage.
Part A – Liability Coverage
Part A pays claims if the insured business’ negligence caused accidental bodily injury or property damage to someone.
Example #1 – Part A Coverage – Liability
Mike is shopping at Sedano’s Supermarket in Miami, Florida. He slips and falls. He claims that he slipped on dirty water and smudges.
He claims that he aggravated a prior injury. After the fall, he has two skin grafts to his Achilles Tendon.
Mike should send a letter to the supermarket requesting their insurance disclosure information. In Florida, the supermarket’s general liability insurer is required to send Mike a copy of its CGL insurance policy.
If Mike can show that the supermarket’s carelessness caused his injury, then the supermarket’s Part A coverage will pay for his medical expenses, lost wages, pain and suffering and other damages.
These facts were similar to those from a case that I settled for $300,000. All settlements on this page are before deduction for attorney’s fees and expenses. Most cases result in a lower recovery. It should not be assumed that your case will have as beneficial a result.
However, just because Part A Coverage covers the supermarket for its negligence, it does not mean that the supermarket or its insurer will not deny liability.
In the above case, the supermarket denied liability. As you can see from the $300,000 settlement, the supermarket’s CGL insurer felt that they had some possible exposure.
That is why they paid $300,000.
Part C – Medical Payments (“Medpay”) Coverage
Part C pays medical expenses to people hurt on the premises of the business within a certain time period of the accident, regardless of whether the business was careless. The time period depends on the language of the policy.
You need to see the CGL policy so that you can know the time limit to submit bills to the CGL insurer to be paid under the Medpay coverage. Part C coverage is known as “Medical Payments Coverage” or “Medpay“.
Some CGL policies do not have Part C Coverage. This is particularly true for larger business, such as the supermarket chain in Example #1.
Do not expect big corporate owned business locations to have Medpay coverage. Their probably won’t be Medpay – Part C coverage if you are hurt at one of the following:
- Publix Supermarket
- Walmart Store
- Walt Disney World or Epcot
- Costco
- Target
- Winn Dixie Supermarket
- A large shopping mall
- A large salon chain such as Hair Cuttery
- Whole Foods
- CVS
- Steak N’ Shake Restaurants
All of the above examples are corporate owned businesses. They do not have franchisees.
Those are just a few examples of some corporate owned big businesses that probably do not have Medpay coverage.
Example #2 – Part C coverage – Medpay
Take the facts of example 1 but assume that there was no substance on the supermarket floor. Assume Mike’s shoes or clothing caused him to slip and fall.
Even though the store did nothing wrong to cause Mike’s fall, the Part C coverage would pay for Mike’s medical expenses within a certain time of the accident. This is because Part C coverage applies without regard to fault.
What Incidents are Not Covered?
Unfortunately not every type of incident is covered. The good news is that most accidents involving customers are covered under a CGL policy.
Incidents that might not be covered in a CGL policy:
- Expected or intended injury
- Liquor liability
- Workers’ compensation
- Autos that the business owns
- Non-Owned & Hired Autos
- Watercraft over a certain length
- Sexual abuse and molestation
In order to find out if the incident is covered, you need to send a written request to the insurer for insurance disclosure information as required by Florida Statutes. The CGL insurer needs to send you a letter (sworn under oath) stating their coverage defenses, if any.
Generally within thirty (30) days they will send you a letter stating their coverage defenses. If they fail to respond in writing, you should send a second request.
You can also ask to speak with a supervisor. If that fails, you can file a consumer complaint which should get you a response.
Some of the above listed incidents are covered.
Example
Philadelphia Insurance Companies (PHLY) is Florida’s largest CGL insurer. They insure many types of industries including, but not limited to, condominiums, day spas and salons.
Philadelphia’s CGL policies for salons and spas have an Occurrence/Aggregate Limit of $1,000,000/$3,000,000.
This means that if you slip and fall at a hair salon, Philadelphia won’t pay you more than $1,000,000 for your personal injury.
Philadelphia’s CGL policy for spas has sexual abuse coverage of $100,000 per occurrence. If you are sexually abused at a salon insured by Philadelphia, the most Philadelphia owes you is $100,000.
Some other CGL insurers for salons and spas may exclude coverage for sexual abuse liability. This means that if you get molested there, the insurance company does not owe you money.
You could still sue the salon or spa, but it is usually much easier to get money from an insurance company than a small business.
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