A commercial general liability insurance policy provides a business with broad protection from third-party injury lawsuits and product liability claims. While a CGL policy is a foundation stone of risk management, a precise understanding of coverage limits is crucial for a business owner.
Potential Gaps in CGL Coverage
Two common exclusions in CGL policies are pollution events and off-premises business activities. A growing concern for businesses is the liability from the actions of their subcontractors.
Filling CGL Coverage Gaps
For the policyholder, the simplest way to prevent a coverage gap is to have their broker persuade the insurance company to narrow or pull the exclusion. An option more likely to succeed involves the broker seeking out a narrowly drawn policy tailored to a business’s coverage need.
The third method is a broker offering risk mitigation suggestions for a business’s operations. A common step here is having a business require proof of liability insurance before hiring subcontractors. In all three cases, a broker with deep knowledge and longstanding relationships with insurance companies can substantially reduce a business’s risk.
Understanding CGL policy coverage in detail is crucial for the success of an enterprise. Spending the time to seek out a qualified and diligent insurance broker is a wise move for a business owner.