Commercial General Liability Policy: The Insurance MVP


There are dozens of property policies that provide protection for anything from common business buildings and personal property to one-of-a-kind types of property insured with inland marine. There is crime insurance, auto insurance, cyber insurance, workers’ compensation, and specialty liability policies to protect special situations or people. However, the most important insurance policy for protecting businesses and organizations is the Commercial General Liability policy (the CGL).

Get to Know the CGL

The CGL policy is especially valuable for several reasons. It is written to provide broad protection for almost any kind of organization or activity. Another benefit of CGL policy exclusions is that they are mostly common sense. For most of the exclusions, other types of policies can often cover those gaps.  

The CGL Policy

  • Defends the insured and pays on their behalf for accidents arising on their premises, any operations happening off their premises, products they make, and work that they complete  
  • Provides protection from common personal injuries like libel and false arrest, and provides protections like medical payments   
  • Allows organizations to buy high limits and stack more coverage on top through excess liability
  • Provides MVP insurance defense   

Priceless Protection in Court

The standard CGL policy sold by practically all insurance companies today provides defense of the named insured, and other insureds named in the policy, without a dollar limit. When you consider the costs of investigating a liability claim, answering lawsuits, legal and court costs, and paying the expenses of the insured or witnesses at court proceedings, this protection is hard to overvalue.  An even greater benefit of the CGL policy is the assurance that the insurance company will continue defense until the claim is resolved through a settlement with the third party or until the court reaches a verdict.   

CGL is a Hero

In today’s world, anybody can sue anybody for anything and the costs to the defendant are inescapable.  Can you imagine the panic small business owners and their employees would feel if they were named in a lawsuit and there was no one to guide them on what to do next? It could be an intimidating and expensive experience for them. 

Thank goodness there is a not-too-terribly-complicated insurance contract that a business or organization can buy that will come to the rescue when those claims eventually come in.

Disclaimer:  The CGL policy provides protection for common causes of bodily injury and property damage for which the insured is responsible. Types of damages other than bodily injury and property damage may be available in other specialty liability policies.

Want to learn how to use the CGL in your work?

Build your confidence with commercial casualty exposures and coverages and learn the CGL policy inside and out by attending a CISR Commercial Casualty I course.  It strengthens your ability to have productive, confident interactions with your commercial customers in the area of commercial casualty exposures and coverages. 

About the Author, Paul Z. Martin, CPCU

Paul Z. Martin, CPCU, is the Director of Academic Content and Team Lead for the National Alliance for Insurance Education & Research. Paul works with Alliance faculty, agents, and other industry professionals to deliver high-quality insurance content and education. Read Paul’s bio here.

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