Common Liability Insurance Exclusions

Most businesses in Florida and elsewhere purchase some form of commercial general liability (CGL) insurance coverage so as to avoid the potentially disruptive effect of a personal injury lawsuit brought against the business.

For example, a small retail business with few assets may only have enough funds to cover costs — if a customer slips-and-falls on the premises, and thus severely injures themselves, then the ensuing lawsuit could seriously disrupt (and even bankrupt) the business.

CGL insurance coverage is fairly expansive, and covers all damages associated with the policyholder’s negligence (in a business context).  As a CGL policyholder, however, you may find that the insurer denies coverage due to an exclusion of which you were not fully aware.

In fact, certain exclusions are rather common in the CGL insurance context, so it’s important to take them into consideration when submitting a claim (and ultimately, when challenging the adverse decision of your insurer).

Consider the following.

Intentional Acts

Generally speaking, intentional acts are not covered by CGL insurance — only negligent acts are covered.  For example, if you have a negative relationship with a particular customer, and in a bout of anger, you shove the customer to the ground and cause them to suffer injuries, then your CGL insurer will likely avoid a payout due to the intentional nature of the act at issue.

No Business Pursuit Involved

CGL insurance policyholders are not entitled to submit a claim for benefits for liabilities sustained in a situation that is unrelated to their business.  Insurers generally exclude all activities that are not defined as a business pursuit.

For example, suppose that your employee crashes a company car during the delivery of goods to a customer.  As the delivery is for a legitimate business purpose, the CGL insurance would likely cover the liabilities.  On the other hand, if you had taken a company car to purchase a gift for your wife, then the acts at-issue would not be for a legitimate business purpose, and CGL insurance would not cover it.

Professional Negligence

Professional negligence is not covered by CGL insurance — instead, you will have to purchase separate professional malpractice insurance coverage.  For example, if you run a private health clinic, then your malpractice (i.e., ordering the wrong medicine for a patient) will not be covered by CGL insurance.

Contract Disputes

Contract disputes are also not covered by CGL insurance.  Instead, CGL insurance generally only covers personal injury damages and related property damages.  For example, if you breach a contract that you entered with a manufacturer, and you are on-the-hook for millions in damages for breach, your CGL insurer is highly unlikely to cover such liabilities.

Environmental Liabilities

Pollution and environmental claims (i.e., toxic tort issues) are not covered by CGL insurance, in Florida and elsewhere.  If you wish to have such liabilities covered by insurance, you’ll have to purchase separate environmental liability coverage.

Speak to an Experienced Miami Insurance Litigation Lawyer

Commercial general liability insurance may be expensive, but that does not necessarily mean that your insurer will easily agree to your submitted claim for benefits — in fact, the potential for significant liabilities means that insurers are likely to dispute your claim for benefits and attempt to deny, delay, undervalue, and otherwise mishandle your claim.  By doing so, insurers create a hostile atmosphere that puts you in a vulnerable position, and that will ostensibly compel you to reach an unfavorable compromise.

Ver Ploeg & Marino, P.A., is a Miami-based insurance litigation firm with over two decades of experience representing policyholders in disputes with their insurers, including situations that involve CGL insurance.  We believe that successful litigation demands comprehensive, personalized legal representation, and as such, we are committed to keeping clients “in the loop” throughout the litigation process so that their concerns are fully addressed.

Call (305) 577-3996 or submit an online form to speak to an experienced Miami insurance litigation lawyer here at Ver Ploeg & Marino, P.A.

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