Coverages
Commercial General Liability
The general liability policy provides the insured with protection against legal liability imposed by violations in tort. These violations may be violations of the insured or the insured's employees, or the violations of others, the liability for which is assumed by the insured through contracts. This insurance coverage will pay on behalf of the insured for: (a) the damages, up to the policy limits, for which the insured is liable; (b) defense and investigation costs, in addition to the policy limits; and (c) certain specified supplementary payments (i.e., expenses incurred by the insured in assisting the company in the investigation of suits, costs taxed against the insured in a suit, pre- and post-judgment interest, etc.).
There are a number of basic requirements that must be met in order for a given liability claim to be covered under the policy. The first and most basic of these requirements is that the insured must be legally obligated to pay damages to a third party. With certain exception (e.g., premises medical payments), the policy will not respond on behalf of the insured to pay damages for which the insured is not legally liable. However, defense of lawsuits is provided even when lawsuits are frivolous. The legal liability must be to third parties because the insured could not be legally liable to itself and liability for injuries to employees of the insured is not within the scope of this coverage.
A second major requirement for coverage to apply is the occurrence of injury or damage for which the insured is legally liable. With the exception of certain perils, such as personal injury or advertising injury (e.g., libel, slander, defamation of character, etc.), the general liability policy will respond only to bodily injury or property damage for which the insured is legally liable. Breaches of contracts and many types of torts (e.g., trespass, nuisance, deceit, inducing breach of contract, etc.) which do not involve bodily injury or property damage are not normally covered by the policy.
A third requirement for general liability coverage to apply is the compliance of the insured with the various provisions of the insurance policy. The insurance policy is a contract that imposes certain duties and responsibilities on the insured (e.g., payment of premium, reporting of events that may lead to claims, etc.). Unless the insured complies with these requirement, the insurer may be able to deny coverage.