Liability Insurance

Commercial General Liability (CGL) insurance protects property owners and managers when someone is injured on the premises or when the operation of the building causes damage to others. In commercial real estate this typically covers slip-and-fall claims, injuries to tenants or visitors, damage to neighboring property, and certain legal defense costs. Coverage is usually written on an occurrence basis with separate limits for each occurrence and an annual aggregate; many leases also require the owner or manager to name tenants, lenders, or property managers as additional insureds. Limits that look adequate for a small office building are often too low for multi-family, mixed-use, or higher-traffic retail properties, so owners commonly add an umbrella or excess liability policy. Liability insurance does not replace property (hazard) coverage and does not cover the owner’s own employees (that is workers’ compensation) or most professional errors; the policy should be coordinated with the lease, the property management agreement, and any association documents so that who is responsible for what is clear before a claim occurs.