Legal Definitions - comprehensive general-liability policy

A comprehensive general-liability policy is a type of insurance contract that provides broad coverage for a business's legal responsibility for injuries to people or damage to property that occurs as a result of its operations, premises, products, or completed work. It protects the business from financial losses arising from claims of negligence or other wrongful acts that cause bodily injury or property damage to third parties.

Here are some examples to illustrate how a comprehensive general-liability policy works:

• Imagine "The Daily Grind," a local coffee shop. A customer, while waiting for their order, trips over a loose rug near the counter, falls, and breaks their arm. The customer then sues The Daily Grind for medical expenses and pain and suffering.

  How it illustrates the term: The Daily Grind's comprehensive general-liability policy would cover the legal defense costs and any settlement or judgment awarded to the customer, as the injury occurred on the business's premises due to a condition related to its operations.

• Consider "Apex Construction," a company building a new office complex. During the construction process, a piece of equipment accidentally swings too wide and damages the roof of an adjacent building, causing water leakage inside.

  How it illustrates the term: Apex Construction's comprehensive general-liability policy would cover the cost of repairing the damaged roof and any interior water damage to the neighboring property, as the damage occurred during the course of the company's business operations.

• Suppose "Eco-Clean Solutions" manufactures and sells a line of environmentally friendly cleaning products. A batch of their floor cleaner is found to be defective, causing discoloration on several customers' hardwood floors after use.

  How it illustrates the term: The comprehensive general-liability policy held by Eco-Clean Solutions would cover the costs associated with repairing or replacing the damaged floors, as the property damage resulted from a defect in a product manufactured and sold by the business.