What Your General Liability Policy Doesn’t Cover
Most business owners carry general liability insurance and feel reasonably covered. That confidence is well-placed, up to a point. A commercial general liability (CGL) policy provides real, meaningful protection against third-party claims for bodily injury, property damage, and certain advertising injuries. However, it also comes with a list of exclusions that can catch businesses off guard when a claim arises.
Understanding those exclusions isn’t just an insurance exercise. It’s a practical step toward making sure your business doesn’t absorb a loss that could have been covered with the right policy in place.
What Are the Most Common CGL Exclusions for Businesses?
A standard CGL policy is structured around two main coverage sections. Coverage A handles bodily injury and property damage. Coverage B handles personal and advertising injuries, think libel, slander, or copyright disputes. Both sections carry exclusions worth knowing.
Employee injuries — If one of your employees is hurt on the job, your CGL policy won’t cover it. Workers’ compensation insurance handles employee injuries, and it’s required by law in Delaware, Pennsylvania, and New Jersey for most employers. These are two separate policies with two separate purposes.
Your own property — CGL policies protect others from harm caused by your business. They don’t protect your own building, equipment, or inventory. If a fire damages your office or a pipe bursts and ruins your stock, that’s a commercial property insurance claim, not a general liability claim.
Commercial vehicles — If a company vehicle is involved in an accident, your CGL policy steps aside. Commercial auto insurance is what responds to road-related liability claims involving vehicles your business owns or leases.
Pollution incidents — Businesses that store chemicals, handle waste, or operate in environments where contaminants are present should know that CGL policies broadly exclude pollution-related claims. A separate environmental liability policy is needed to cover that exposure.
Faulty products or professional services — If a client claims your product failed or your professional advice caused them harm, CGL coverage generally doesn’t apply. Product liability and professional liability (also called errors and omissions) insurance exist to fill those gaps.
What Does Coverage B Exclude and Does It Affect Your Business?
Coverage B protects against personal and advertising injury claims, but with limits. Intentional acts, criminal activity, and false or misleading advertising claims are all excluded. If your business publishes content before your policy period begins, injuries arising from that content won’t be covered either.
For most traditional businesses, such as retail, professional services, and trades, Coverage B exclusions are less of an everyday concern. However, for businesses active in digital marketing or with a significant online presence, these exclusions are worth discussing with your agent.
How Do You Fill the Gaps in Your Business Insurance Program?
The most important takeaway here is simple, one policy rarely does everything. A well-structured small business insurance program typically combines general liability with commercial property, commercial auto, workers’ compensation, and sometimes professional liability or an umbrella policy, depending on your industry and exposure.
The right mix depends on what your business actually does, not just what industry you’re in. A trusted, independent insurance agency that knows your operation can help you identify where gaps exist and how to address them.
Want to make sure your business is properly protected? Reach out to McHugh Insurance Group to review your coverage.
Comments are closed