What Happened to the "Comprehensive" in "Comprehensive General Liability Insurance?"
Comprehensive General Liability Insurance is simply the old term for General Liability Insurance, a business insurance policy that helps pay for lawsuits over slip-and-fall accidents, product liability, and advertising injuries. To understand why the insurance industry dropped the word "comprehensive," we need to take a trip back in time.
Life before the eighties was a little different. Tab Cola flowed like water, the USSR stood menacingly against the West, and small-business owners could expect to purchase a Comprehensive General Liability insurance policy. But just like Tab and the USSR, "comprehensive" liability insurance policies fell by the wayside.
Why? In part because "comprehensive" means all-inclusive, and no insurance policy is truly all-inclusive. Insurance companies' decision to drop the "comprehensive" reflected the reality that there will always be cases that your insurance policy will not cover.
For example, if one of your employees gets into a fender bender with a company vehicle, you'll be out of luck unless you have a Commercial Auto policy. If a government agency alleges you are degrading a water source, you may need a policy that covers environmental liability. General Liability Insurance usually can't cover these kinds of lawsuits. (More on that in "5 Things General Liability Insurance Doesn't Cover.")
"Commercial General Liability Insurance:" A More Honest Name
An insurance policy that is totally comprehensive – that is, one that covers every type of lawsuit that could possibly exist – would be cost-prohibitive. The insurance company would have to pay out no matter what went wrong. And that would mean sky-high premiums for you.
That's why today, what was once called "Comprehensive General Liability Insurance" is now known as Commercial General Liability Insurance. It's essentially the same protection, just with a different name. Sort of like how Prince became the Artist Formerly Known as Prince or that crazy love symbol.
What Does General Liability Insurance Cover?
Commercial General Liability Insurance offers essential coverage when your business is faced with a third-party lawsuit over:
- Bodily injury: E.g., a restaurant is sued when a customer slips and falls on an icy patch on the restaurant's property.
- Property damage: E.g., a landscaper is sued when he damages a sprinkler system while digging.
- Copyright infringement: E.g., an artist sues a small business for using her artwork without permission.
- Reputational injury: E.g., a contractor sues when your small business tweets that he's repeatedly late for work.
These lawsuits can be brought against a business by vendors, subcontractors, customers, volunteers, and other non-employees. When this happens, the insurance company providing the Commercial General Liability policy can help pay for legal expenses.
Learn more in "What Does General Liability Insurance Cover?"
What Does General Liability Insurance Exclude?
There are many types of lawsuits that Commercial General Liability Insurance does not protect against, so it's important to know what additional coverage your business might need. Some of the things that are excluded from a General Liability policy are…
Different businesses have different needs and liabilities, so talk with your insurance agent about what coverage you might need in addition to General Liability Insurance.
Although you can't protect against everything, you can at least try not to wind up like Tab. Or even worse, Tab Clear.