Who Is An Insured Under A CGL Policy?
Who Is An Insured Under A CGL Policy?.
The first thing you should do as a business or property owner is to make sure that you are insured against any damages or losses that might affect your company. These damages and losses can include losses from within the company itself, or it might come from third-parties who are affected by the loss occurring.
The insurance company agrees to pay amounts the insured is legally obligated to pay as damages for bodily injury and property damage that this insurance covers. It also has the right and duty to defend the insured against any suit that seeks those damages but only those suits that seek damages that this insurance covers.
Insurance can be a complicated thing to get a handle on - but it doesn't have to be. Here's more about just who is an insured under a CGL policy?
Who is an insured under a CGL policy? Learn who actually has coverge in commercial general liability polices to be certain your business is protected from costly third party lawsuits for bodily injury or property damage.
Who Does A General Liability Insurance Policy Cover?
Your commercial general liability insurance should generally cover what's called the named insured, whom are the parties that are mentioned within the insurance policy's contract. The named insured entity on the declarations determines who is an insured:
- Individual - The individual and his or her spouse are insureds but only for conduct of a business the named insured solely owns.
- Partnership or Joint Venture - The partnership or joint venture and its members, partners, and their spouses are insureds but only for conduct of the business.
- Limited Liability Company - The limited liability company (LLC) is an insured. Members are insureds for conduct of the business. Managers are insureds with respect to their duties as managers.
- Organizations other than above - The organization is an insured. Executive officers and directors are insureds but only for their duties as such. Stockholders are insureds only with respect to their liability as stockholders.
- Trust - The trust is an insured. Trustees are also insureds but only to the extent of their duties as trustees.
Your CGL policy will also cover what's called automatic insureds: These are people who are covered by the insurance policy because of their professional or personal connection to the named insured that we talked about above. Who is an insured under a CGL policy? - read on:
Who Are Automatic Insureds In A General Liability Policy?
It's pretty easy to figure out who the named insured people are on the policy: Usually all you have to do is take a look at the policy's documents, and the named insured will be right there - well, named, on the contract.
As for anyone else, the automatic insureds will include anyone who is associated with the named insureds mentioned above. Here are some examples for who might be considered an automatic insured according to a general liability insurance policy:
- Volunteer workers when performing duties related to conduct of the business. This is subject to certain conditions, exceptions, and exclusions.
- Employees, other than executive officers or managers, but only for acts within the scope of their employment or while they perform duties related to conduct of the business. This is subject to certain conditions, exceptions, and exclusions.
- Any person or organization that acts as the named insured's real estate manager.
- Any party that has proper temporary custody of insured property if the named insured dies. However, this status applies only until a legal representative is appointed.
- The named insured's legal representative if the named insured dies, with respect to the duties as such. The legal representative assumes all of the deceased named insured's rights and duties. This goes beyond the standard insured status and extends to rights to cancellation, conditions, and other elements assigned to only named insureds.
- Newly acquired or formed organizations are named insureds for not more than 90 days. This applies only if the named insured either owns or has a majority interest in the organization. The newly formed or acquired organization cannot be a partnership, joint venture, or limited liability company. This provision is limited to not more than 90 days after the organization is formed or acquired, or until the end of the policy period, whichever comes first.
No party is an insured with respect to conduct of any current or previous partnership, joint venture, or limited liability company that is not on the declarations as an insured.
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Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:
Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.
Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties
Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.
Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.