California Property & Casualty Broker-AgentCasualty InsuranceMedium
A California business client operates a consulting firm that provides financial advice. They are purchasing a Commercial General Liability (CGL) policy. Which of the following potential losses would typically NOT be covered under their standard CGL policy?
- AProperty damage to a client's laptop caused by an employee accidentally spilling coffee on it.
- BA client suffers significant financial losses due to negligent advice provided by the firm.
- CA client slips and falls on a wet floor in their office, sustaining a bodily injury.
- DA third party sues the firm for libel after a defamatory statement is published in an advertisement.
Show answer & explanationAnswer & explanation
Correct answer: B. A client suffers significant financial losses due to negligent advice provided by the firm.
Standard Commercial General Liability (CGL) policies are designed to cover bodily injury, property damage, and personal and advertising injury. They specifically exclude coverage for professional errors or omissions, which are addressed by Professional Liability (E&O) insurance.
Why the other options are wrong
- A. This is property damage caused by an employee, typically covered by CGL Coverage A.
- C. This is a bodily injury claim arising from the premises, typically covered by CGL Coverage A.
- D. This is a personal and advertising injury claim (libel), typically covered by CGL Coverage B.
CGL vs. Professional Liability
Commercial General Liability (CGL) covers bodily injury, property damage, and personal/advertising injury, while Professional Liability (Errors & Omissions) covers financial losses arising from professional negligence or mistakes.
- CGL excludes professional services.
- Professional Liability is specific to financial harm from advice/service.
- Businesses often need both for comprehensive coverage.
Memory trick: CGL protects your business from general mishaps, not professional blunders.