Insurance

There are two very important promises that are contained in your company's commercial general liability insurance policy (the "CGL policy"). These promises are referred to as the duty to pay (also referred to as the duty to indemnify) and the duty to defend.

Below are specific examples of insurance policies that are commonly held by businesses and are either first party insurance or third party insurance type policies. These types of insurance policies are commonly referred to in the insurance industry as commercial lines of coverage.

Employers too often assume that job titles, job descriptions or simply categorizing an employee as "salaried" automatically enables the employer to categorize an employee as exempt, thus avoiding overtime pay. This is NOT the case. The Fair Labor Standards Act (the "FLSA") and the U.S. Department of Labor (the "DOL") have very specific guidelines for classifying employees as exempt or non-exempt.

The umbrella liability and/or the excess liability policies are important elements of any company’s insurance program. They provide the source of protection for catastrophic liability losses by establishing relatively high limits of insurance over and above the commercial general liability and automobile liability policies--which are commonly referred to as primary policies.

An employer who purchases employment practices liability insurance likely expects coverage for claims of unlawful employment practices. Unfortunately, the devil is in the details in terms of what types of claims are covered and what types of claims are not covered, as well who is responsible for the legal fees incurred on the part of the employer in defense of such claims.

There are two very important promises that are contained in the commercial general liability insurance policy (the “CGL policy”). These promises are referred to as the duty to pay (also referred to as the duty to indemnify) and the duty to defend. The duty to pay originates under the CGL policy Insuring Agreement. Here it provides that the insurance carrier is obligated “to pay sums that the Insured becomes legally obligated to pay because of Bodily Injury or Property Damage”.

There are two very important promises that are contained in the commercial general liability insurance policy (the “CGL policy”). These promises are referred to as the duty to pay (also referred to as the duty to indemnify) and the duty to defend. The duty to pay originates under the CGL policy Insuring Agreement. Here it provides that the insurance carrier is obligated “to pay sums that the Insured becomes legally obligated to pay because of Bodily Injury or Property Damage”. The duty to defend also originates under the insuring agreement.

As an employer, you do not want to hire a new employee only to find out shortly after the hire, that the employee had signed a non-compete agreement with his or her previous employer. The employee in that instance may have less value to your company and the hiring may in fact lead to your company being named in a lawsuit along with the employee where the employer seeks to enjoin or restrict that employee working for you or doing certain things as an employee for your company.

To complete any analysis of the coverage that exists under a company’s commercial general liability (“CGL”) insurance policy, it is important to look at the exclusions, endorsements and conditions.

Exclusions. First, it is important to understand that the insuring agreement in the CGL policy is very broad. The many exclusions that likewise exist take away coverage that the broad insuring agreement otherwise provides.

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