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Commercial General Liability Insurance in Texas

Commercial General Liability Insurance is a type of liability insurance that insures for losses arising from claims in the course of the insured business’ operations. This protects an insured business when it negligently causes injury or damage to another person, their property, or their reputation. This type of coverage will insure for damages for which you could be held legally liable due to bodily injury, property damage, personal and advertising injury, such as slander.

Commercial general liability insurance offers coverage against claims of bodily injury, property damage or personal and advertising injury (invasion of privacy) arising out of your operations. Policies can cover owned premises; non-owned premises; independent contractors; products & completed operations; liquor law violations; crime; services rendered under contract; and contractual liability. It is not mandatory for businesses to carry this type of insurance, but it is often recommended because the costs of defense and potential judgments can be high.

The general liability insurance market has changed dramatically in the last few years. New coverage forms are being written by carriers at much higher limits with much lower deductibles. The idea behind these changes is twofold — firstly to make sure that both injured parties as well as insureds are fully protected from any unforeseen liabilities that could arise out of their businesses or personal activities. Insurers are looking to go one step further and also offer a more comprehensive package that covers off all possible liabilities with a limitless liability cap, which is often referred to as an All Risk Policy.

Factors That Determine the Rates

The most important factors determining your rates will be your location, the size of your business and its history. In fact, claims history is probably the single most important factor in determining rates for this type of insurance. The more claims you have filed on your property or personnel, the higher your premiums are likely to be. That’s why companies are now looking at offering their commercial general liability insurance clientele computerized loss control services that will help them reduce their frequency and severity of bodily injury or property damage occurrences they become actual losses that require reporting.

Commercial general liability insurance rates depend on the type, size and number of operations as well as your claims history. Our agents will use these factors to determine your premium, so it’s important that you take the time to speak with one of our experienced Commercial General Liability Insurance professionals when considering this type of coverage for your business. The more accurate information you provide, the more thoroughly we’ll be able to assess the appropriate levels and types of protection for your company and its needs.

Claims-made versus Occurrence policies

In commercial general liability insurance, there can be two types of claims. They are claims-made policies and occurrence policies.

Occurrence Policy

An occurrence policy covers a claim that happens while a policy is in force, regardless of when it was made. So, this protects you from injuries or damages that occur during the policy period. This type of coverage is better suited to companies that have a constant need for protection from claims.

Claims-made Policy

On the other hand, claims-made policies cover claims made during the period the policy is in force no matter where the claim originates from as long as it is reported to the insurance company before the ending date of a policy. Claims outside of the policy period are not covered. However, there are exceptions when there are special arrangements made beforehand, and these can be in two forms: run-off coverage and prior acts coverage.

Run-off coverage or tail coverage – this is coverage that covers claims made even after the policy has expired. It allows you to protect yourself against losses that happen after the expiration date as well as those which occurred during the life of your policy. This is sometimes called the “extended reporting period” policy. Usually, the extended period is from 30 to 60 days after the expiration date.

Prior acts coverage – this is also an endorsement and it covers claims arising due to injury or damage suffered by someone who was not part of any way involved with your company at the time the policy was in force. This covers anything from injuries caused by asbestos and environmental conditions, and bodily harm caused by former employees (negligent hiring).

Prior acts coverage – this is also an endorsement and it covers claims arising due to injury or damage suffered by someone who was not part of any way involved with your company at the time the policy was in force. This covers anything from injuries caused by asbestos and environmental conditions, and bodily harm caused by former employees (negligent hiring).

The important difference between these two types of liability insurance is that claims-made policies have no retroactive coverage for claims filed against an insured business after its expiration date, which means there could be significant lapses in transmission time between an incident occurring and being reported to your insurer. In contrast, occurrence policies cover incidents from any point within their duration so you won’t have gaps between reporting times , so you won’t have to worry about lapses in your coverage.

Using an occurrence form of commercial general liability insurance is especially helpful for companies that need to file workers’ compensation claims because these are usually reported immediately after an incident occurs, and the company’s carrier typically requires immediate reporting as well.

Both policies can be written on either a claims-made or an occurrence basis, depending on various factors like your history of claims and losses. For most business owners it is best to use the “occurrence” policy type since these provide higher limits of protection at lower premiums than claims-made policies do. This makes occurrences policies better suited for businesses with high potential risks like repair shops, which handle dangerous equipment that could lead to injuries or damage to property.