Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)General InsuranceMedium
A business owner purchases a commercial general liability policy. This type of policy primarily protects the business from:
- ALoss of income resulting from business interruption.
- BEmployee injuries occurring on the job.
- CClaims from third parties for bodily injury or property damage for which the business is legally responsible.
- DLosses due to direct damage to the business's own property.
Show answer & explanationAnswer & explanation
Correct answer: C. Claims from third parties for bodily injury or property damage for which the business is legally responsible.
Commercial General Liability (CGL) insurance is designed to cover a business for claims of bodily injury and property damage for which the business is found legally liable to third parties.
Why the other options are wrong
- A. This is covered by business income (or business interruption) insurance, not CGL.
- B. This is covered by Workers' Compensation insurance, not CGL.
- D. This is covered by property insurance, not CGL.
Commercial General Liability (CGL)
A standard insurance policy that provides broad coverage for business risks, primarily for claims of bodily injury and property damage caused to third parties.
- Covers premises, operations, products, and completed operations.
- Protects against legal liability to others.
- Does not cover employee injuries or property damage to the insured's own property.
Memory trick: CGL protects from claims by others, while property protects your own coffers.