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Wed September 17, 2008
 
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COMMERCIAL GENERAL LIABILITY
Also See:

INTRODUCTION
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Commercial General Liability (CGL)
This coverage protects businesses from claims arising from alleged bodily injury, personal injury or property damage liability arising out of operations. It includes protection for civil suits arising out services rendered, products sold or operations in general including coverage for accidents occurring in and around premises owned or occupied by the Insured. Coverage payments include judgments, attorney fees, court costs, or other related expenses.

In Canada insurance companies issue their own forms but they are generally based on IBC the (Insurance Bureau of Canada) form.

General liability insurance covers its Insureds for:

"those sums that the insured becomes legally obligated to pay as compensatory damages because of "bodily injury" or "property damage" to which this insurance applies."

Some of the causes of action out of which legal obligations for property damage, bodily injury and personal injury arise are as follows:

  • Negligence -  Not only are people responsible for the intentional harm they cause, but their failure to act as a reasonable person would be expected to act in similar circumstances (i.e. "negligence") will also give rise to compensation. Negligence, if it causes injury to another, can give rise to a liability suit under tort. Negligence is always assessed having regards to the circumstances and to the standard of care which would reasonably be expected of a person in similar circumstances. Everybody has a duty to ensure that their actions do not cause harm to others.

  • Gross negligence - Between negligence and the intentional act there lies yet another, more serious type of negligence which is called gross negligence. Gross negligence is any action or an omission in reckless disregard of the consequences to the safety or property of another. (depends on the circumstance whether it would be covered).

  • Absolute liability - A type of liability that arises from extremely dangerous operations. An example would be in the use of explosives: A contractor would almost certainly be liable for damages caused by vibrations of the earth following an explosive detonation. With absolute liability it is usually not necessary for a claimant to establish that the operation is dangerous. See also Strict Liability.

  • Strict liability - Usually used when referring to Products coverage. The liability that manufacturers and merchandisers may be subject to for defective products sold by them, regardless of fault or negligence. A claimant must prove that the product is defective and therefore unreasonably dangerous.  See also Absolute Liability.

  • Vicarious liability - When a person is held responsible for the tort of another even though the person being held responsible may not have done anything wrong. This is often the case with employers who are held vicariously liable for the damages caused by their employees.

  • Liability assumed by the insured under contract refers to liability incurred when one promises to indemnify or hold harmless another. It does not refer to liability that results from breach of contract, which is generally uninsurable.

  • Trespass to persons or to property - Unlawful interference with another's person, property or rights. Theoretically, all torts are trespasses.

  • Nuisance - Excessive or unlawful use of one's property to the extent of unreasonable annoyance or inconvenience to a neighbour or to the public. Nuisance is a tort.

  • Statutory Liability - The written laws approved by legislatures, parliaments or houses of assembly (i.e., politicians). Also known as "legislation" provided that the legal obligation imposed by statute relates to a covered event, i.e. property damage or personal / bodily injury.  Statutory Liability can be related to Directors & Officers Liability and similar coverages in respect to source deductions, taxes, unpaid wages, severance and termination pay, and  corporate law, or it can related to Environmental Liability flowing from environmental law or to CGL type exposures as with the Occupiers Liability Acts and Innkeepers Act

Punitive damages are not generally covered although they can be, if permitted in the jurisdiction in which the policy is issued / claim is made.  See Punitive damages.

IBC FORMS
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Some of the forms available from the IBC (Insurance Bureau of Canada) are as follows. Many Canadian insurers use these forms as a basis for their own.

# Title Edition Form no.
  Policy Forms    
  Commercial General Liability Declarations 03-2005 2100Dec
  Commercial General Liability Policy, (Occurrence Form) 03-2005(r) 2100
  Commercial General Liability Policy, (Claims Made Form) 03-2000(r) 2200
  Endorsements and general forms    
1. Endorsement to Include "Defence Expense" within the Policy Limits (for use with Form No. 2100) 8 87 2105
2. Extended Reporting Period Endorsement (for use with Form No. 2200) 8 87 2201
3. Exclusion of Specific Accident(s), Products, Work or Location(s)
(for use with Form No. 2200) 		8 87 2202
4. Amendment of Section V -- Extended Reporting Periods for Specific Accident(s), Products, Work or Location(s) (for use with Form No. 2200) 8 87 2203
5. Extended Reporting Period Endorsement for Specific Accident(s), Products,
Work or Location(s) (for use with Form No. 2200) 		2 86 2204
6. Endorsement to Include "Defence Expense" within the Policy Limits
(for use with Form No. 2200) 		8 87 2205
7. Deductible Endorsement 8 87 2301
8. Garage Liability Extension Endorsement 11 86 2302
9. Employers' Bodily Injury Liability 11 86 2303
10. Limitation of Coverage to Designated Premises 8 87 2304
11. Exclusion -- Products -- Completed Operations Hazard 8 87 2305
12. Tenants' Legal Liability -- Broad Form - for use with Claims Made form 8 87 2306
13. Additional Property Damage Exclusion 8 87 2307
14. Contractual Liability Limitation Endorsement 8 87 2308
15. Exclusion -- Health or Cosmetic Services - for use with Claims Made form 8 87 2309
16. Exclusion -- Products and Professional Services ( Druggists) - for use with Claims Made form 8 87 2310
17. Exclusion -- Products and Professional Services (Optical and Hearing Aid Establishments) - for use with Claims Made form 8 87 2311
18. Exclusion -- Errors and Omissions - for use with Claims Made form 8 87 2312
19. Misinterpretation of Date Exclusion Deletion Endt. (For use only with Form IBC 2100-2 or IBC 2200-2) 4-1998 2315-2
20. Misinterpretation of Date Exclusion Endorsement (For use only with Form IBC 2100 or IBC 2200) 4-1998 2316
21. Commercial General Liability Policy CCDC Endorsement 04-2005 2320
22. Certificate of Insurance 03-2000 2328
23. Data Limitation Endorsement (For use with IBC 2100 or IBC 2200) 12-2001 2330
24. Terrorism Exclusion Endorsement (For use with IBC 2100 or IBC 2200) 12-2001 2332
25. Farmers Personal Liability Policy 5-92 2400
26. Limited Pollution Liability Extension Option 1 08-2007 2334
27. Limited Pollution Liability Extension Option 2 (120 hours) 08-2007 2336
       

 

BASIC INSURING AGREEMENTS - CGL FORM 2100
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  • COVERAGE A. BODILY INJURY and PROPERTY DAMAGE LIABILITY
  • COVERAGE B. PERSONAL and ADVERTISING INJURY LIABILITY
  • COVERAGE C. MEDICAL PAYMENTS
  • COVERAGE D. TENANTS' LEGAL LIABILITY

SOME ADDITIONAL ENDORSEMENTS
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A sample of additional endorsements to those already listed in the IBC listing:

  • Forest Fire Fighting Expenses (costs and expenses of others only)
  • Innkeepers Liability
  • Elevator collision (property not owned by the Insured)
  • Non-owned auto with contractual exclusion deleted
  • LL for damage to hired autos- SEF 94
  • Employee Benefits Liability
  • Abuse
  • Rip & tear coverage
  • Voluntary compensation for employees not subject to Workers Comp
  • Wrap up Liability / Excess DIC wording

DEFINITIONS
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Refer to Glossaries section of Library
Also Refer to Insurance Marketplace (Rough Notes

INSURANCE SOURCES
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OTHER RESOURCES
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