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 claim (legal), claims which the insurer is law, legally required to pay. In exchange for an initial ...

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. In the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

insurance market this is known as ''Commercial General Liability'' (CGL). 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 liberal arts and pure sciences education or professional development education. Some professional services, such as architects, accountants, engineers, d ...

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

liquor Liquor ( , sometimes hard liquor), spirits, distilled spirits, or spiritous liquor are alcoholic drinks produced by the distillation of grains, fruits, vegetables, or sugar that have already gone through ethanol fermentation, alcoholic ferm ...

, automobile liability, and directors and officers liability, with separate insurance policies being 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. A CGL insurance includes both public liability and product liability insurance.

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 In finance, a surety , surety bond, or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a person or company (a ''sure ...

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