Commercial general liability insurance is a broad type of

insurance policy In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known a ...

which provides

liability insurance Liability insurance (also called third-party insurance) is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims and protects the in ...

for general business risks. Commercial General Liability (CGL) is the specific name for a policy of this type in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

insurance market. It is the "first line" of coverage that a business typically purchases, and covers many of the common risks that can happen to any type of business, such as bodily injury or property damage on the business premises or due to the business operations, personal and advertising injury, and medical payments. As with other types of liability insurance, CGL insurance normally imposes on issuing insurers duties both to defend and to indemnify insureds with respect to covered claims. CGL insurance is generally categorized as an "all-risks" type of insurance, under which it provides coverage for risks unless specifically excluded. Specific risks that are normally excluded from CGL coverage include

professional services Professional services are occupations in the service sector requiring special training in the arts or sciences. Some professional services, such as architects, accountants, engineers, doctors, and lawyers require the practitioner to hold profe ...

pollution Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the ...

, liquor, automobile liability, and directors and officers liability, and separate insurance policies are available to cover these situations. A wide variety of other coverage exclusions, extensions, limitations, and other policy terms and conditions may be included by endorsements to a CGL policy.

Construction defects coverage

Whether or not general liability insurance covers construction defects or "faulty workmanship" is a matter of some debate, as some insurers have viewed poor workmanship as a risk that is covered by a surety bond rather than an insurance policy given that a construction professional may have some influence (through attention to detail, skill, and effort) over whether such a defect occurs. Though in certain jurisdictions manufacturers of component parts continue to have coverage under a Commercial General Liability policy if their component part harms a finished product, in this case homeowners pursuing damages to a home caused by defective windows.

References

Liability insurance {{insurance-stub