42
Unit 1 The World of Insurance
Section 2.2
Commercial Insurance
Objectives
After completing this section, you will be able to:
• Dwok‘hmsgdotqonrdnebnlldqbh‘kfdmdq‘kkh‘ahkhsxhmrtq‘mbd-
• Define commercial property insurance.
• Dwok‘hm‘bnlldqbh‘ko‘bj‘fdonkhbx-
• Identify what a business owner’s policy covers.
Commercial General Liability Insurance
Commercial general liability insurance, known in the business
as CGL, covers bodily injury and property damage. Let’s say A-Plus
Remodeling Company puts in a new staircase and fails to secure the
railing. Grandma Kate goes for the railing and pulls it off the wall,
causing her to fall down the stairs. A-Plus Remodeling Company’s
CGL policy pays for the damage to the wall and Grandma Kate’s
medical bills. If Grandma Kate sues the company, the CGL policy
will cover legal expenses. CGL also covers the business premises,
operations, products the business sells or distributes, medical
payments, as well as personal and advertising injury (slander, libel,
copyright infringement, and the like).
Commercial Property Insurance
Commercial property insurance pays for physical damage
or loss of certain kinds of property. The coverage can include
buildings, business personal property (like equipment, furniture, and
merchandise), and the personal property of others. This insurance
can either be for specific perils or no named perils. A business can
buy coverage to pay either the cash value of lost property or its full
replacement cost.
Commercial Package Policy Insurance
Commercial package policy insurance combines two or more
insurance products into one policy. The benefit to buying a package
policy typically comes in reduced premiums. The package would
include only the insurance the particular business needs. These may
be general liability insurance and property insurance, for example.
Terms
commercial general
liability insurance
commercial property
insurance
commercial package
policy insurance
business owner’s
policy insurance
Ethical Insurance
Practices
Dudqxnmdrgntkcadg‘ud
in an honest and ethical
manner. To manage the
risk that an employee
or contractor’s action
will potentially cause
harm, companies and
government entities can
purchase surety insurance.
This kind of insurance
pays the policyholder
should a bonded third
party act dishonestly or fail
to perform a contractual
obligation.