Commercial general liability (CGL) insurance covers a business against third-party claims for bodily injury, property damage, and personal and advertising injury arising from its premises, operations, products, and completed work. It is the coverage every commercial lease and vendor contract requires first, usually on an occurrence form with stated limits.
Every certificate of insurance a building collects has a general liability row, and it is the row that matters most. CGL is the policy that responds when a visitor slips in a tenant's suite, a contractor damages a lobby, or a cleaning crew's chemical injures someone. Insurer overviews such as The Hartford's and the general description at Wikipedia cover the same ground.
What it covers
| Coverage part | Examples |
|---|---|
| Bodily injury and property damage | A customer injured on the premises; a vendor's ladder through a window |
| Personal and advertising injury | Defamation, false arrest, copyright in advertising |
| Products and completed operations | Injury from work the vendor finished last year |
| Medical payments | Small medical costs paid without a lawsuit |
| Defence costs | Usually paid in addition to the limits |
Why leases and contracts require it
The building wants two things: that the party whose operations create a risk is insured for it, and that the building is protected under that party's policy. The first is the CGL policy itself with adequate limits. The second is the set of endorsements that ride on it: additional insured, primary and non-contributory, and a waiver of subrogation. Higher limits are usually met with an umbrella policy stacked on the CGL.
What to check on the certificate
The occurrence box is ticked, the limits meet the lease or contract, the dates cover the work, the named insured is the contracting party, and the endorsements claimed in the description box are attached.
Related terms
Frequently asked questions
What limits do commercial leases usually require for general liability?
Common requirements are $1,000,000 per occurrence and $2,000,000 aggregate for office tenants and most vendors, with higher limits for restaurants, industrial uses, and construction, often reached by adding an umbrella policy. The lease or the owner's insurance program sets the figure.
What is the difference between per occurrence and aggregate limits?
Per occurrence is the most the policy pays for one incident. Aggregate is the most it pays for all incidents in the policy year. A vendor with a $1,000,000 occurrence limit and a $2,000,000 aggregate that has already paid a large claim may have less aggregate left than the certificate suggests.
Does CGL cover the landlord?
Only if the landlord is added as an additional insured by endorsement. The policy protects the named insured, the tenant or vendor. The additional insured endorsement, with primary and non-contributory wording, is what extends defence and payment to the building owner and manager.
Is general liability written on an occurrence or claims-made basis?
Almost always occurrence: the policy in force when the incident happened responds, whenever the claim is filed. Claims-made CGL exists but is unusual, and most leases and vendor contracts require the occurrence form.