Commercial policies are designed for playing different roles. Essentially, all business liability coverages have a relationship with the Commercial General Liability (CGL) Policy. A CGL responds to injury and/or damage to others (or their property) that occur in connection with a given business’ routine operations. The CGL offers broad protection, but it has limits. Various circumstances are outside of its coverage intent and responsibilities.

The case we’ve featured illustrates how a CGL’s coverage boundaries may be pushed! A beauty product maker was sued when another company argued that its own product’s trademark was violated. The insurer for the company being sued had its own position on whether it had any duty to be involved. Please click here for more details.

Please click here for more details.

Main liability protection against harm done to others while operating a business is described as “general liability” for a good reason. It is designed to respond to everyday loss situations related directly to having a business premises with various levels of access and interaction with others. Others include those who are not owners or employees, such as customers, vendors, delivery persons, etc. Losses that are eligible for protection must, typically, involve direct harm to a person (bodily injury) or to their possessions (property damage). The protection usually involves tangible loss.

In the featured case, one business sued another claiming a loss that involved intangible (non-physical) harm. The damage claimed was about a possible loss of business income because of violation of a right rather than direct harm to persons or property. The commercial general liability policy does offer limited protection against claims or lawsuits for some instances of personal and advertising injury.

For an illustration of the form of available personal and advertising protection under a CGL, click on this information excerpted from Gordis on Insurance that is available in Advantage Plus.

Most commercial entities share operation aspects when dealing with customers. Often, once they leave the premises, the loss exposure leaves with them. But there are many sources of loss that differ considerably. The liability hazards faced by businesses are tangible.

However, the operations in the legal dispute were entangled with an allegation of trademark infringement. A trademark is a symbol and/or word that a business uses to distinguish itself or its products in the marketplace. If such a symbol/word is used to distinguish a service, it is called a service mark. If another company makes use of such marks without getting the owner’s permission, that is an act of infringement.

Trade or service mark infringement is a form of advertising injury, as such instances cause confusion in the consumer market, adversely affecting the mark owner’s income and/or reputation. Although intangible, it is a valuable asset that companies zealously protect, often via lawsuit. Competition is fierce and brand loyalties are very high with regard to the beauty product/service sector. Infringement is taken seriously.

Click here to see a discussion of various aspects of the beauty sector and coverage. It is from the beauty salon professional liability section of PF&M found in Advantage Plus.

Personal and advertising loss exposures are quite old. It’s easy to understand how problems likely immediately arose in the U.S. as soon as a second newspaper was created. Media Professional Liability was developed to help deal with loss situations faced by publishers (newspapers, magazines, books, etc.) as well as broadcasters (TV and radio).

Even during the internet’s nascent stage, personal and advertising-related exposures caused turmoil. It was a natural development since various publishers were among the first to use the web. The same problems developed for companies that used the, at the time, new medium to advertise, broadcast and, later, to offer products and service online.

The need for personal and advertising liability’s protection increased significantly and continues to expand because of local, state and federal regulations evolved to address both commercial and consumer privacy issues and abuses.

Click here to see an excerpt of a relevant article on some concerns which originally appeared in the December 2005 issue of Rough Notes Magazine. It is from the magazine’s archives found in Advantage Plus.