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Commercial General Liability Limits Explained

When you look at the Commercial General Liability section of your certificate of insurance, you'll see the following limits:

$1,000,000  | EACH OCCURRENCE
$100,000     | DAMAGE TO RENTED PREMISES (Ea Occurrence)
$5,000          | MEDICAL EXP (Any One Person)
$1,000,000  | PERSONAL AND ADV INJURY
$2,000,000  | GENERAL AGGGREGATE
$1,000,000  | PRODUCTS - COMP/OP AGG

But what do each of these limits cover?

Each Occurrence

The Each Occurrence limit is the most the insurer will pay for one occurrence for any loss arising from bodily injury or property damage to a third party.

Examples of claims covered under the Each Occurrence limit:

Bodily Injury  - a customer slips and falls on your premises or while walking through your job site.  

Property Damage - a contractor floods a customer's house while installing a new appliance.  

An occurrence is defined as 1) an accident or 2) an ongoing exposure to a harmful condition.

Third party can include people like vendors, customers and bystanders.  Third party does not include employees, partners, officers or subcontractors.  

Damage to Premises Rented to You

As a business owner, your landlord may hold you liable in the event of a fire caused by you.  “Damage to Premises Rented to You” covers such a loss.  The limit applies only to the premises (or part of the premises) which is rented by the insured.  This coverage was traditionally named Fire Legal.

Medical Expense

This limit covers reasonable medical expenses for bodily injuries occurring on the insured’s premises or job site, regardless of fault.  While most bodily injury claims are covered under the Each Occurrence limit.  Medical expense coverage allows the insurance carrier to quickly pay off smaller claims and avoid costly litigation.  

Personal / Advertising Injury

This coverage applies to a variety of offenses including false arrest, detention or imprisonment, malicious prosecution, wrongful eviction, wrongful entry of tenant occupied premises, slander, libel, violation of privacy rights, use of another organizations advertising ideas, copyright or trademark infringements.

Aggregate Limits

An aggregate limit is a provision in the policy that limits the amount the insurer will pay for all covered losses in a specific policy period . There are two aggregate limits on the commercial general liability policy.   The commercial general liability policy uses both a General Aggregate limit and a Products and Completed Operations Aggregate limit.

All bodily injury and property damage losses occurring away from the insured's premises and resulting from the insured's products or completed work are subject to the Products and Completed Operations Aggregate limit.

All other losses including, personal injuries, advertising injuries and medical payments are subject to the General Aggregate limit.

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