Minnesota Department of Commerce
Liability insurance, also called Commercial General Liability (CGL), covers four categories of events: bodily injury; damage to others' property; personal injury, including slander and libel; and false or misleading advertising. CGL coverage pays for the injured party's medical expenses. It excludes employees, who are covered by workers' compensation. An Umbrella/Excess Liability policy provides extra protection above a standard policy.
There are three types of legal damages that are typically covered by a CGL policy:
- Compensatory damages: financial losses suffered by the injured party and future losses they may suffer resulting from an injury they claim in the lawsuit.
- General damages: non-monetary losses suffered by the injured party, such as "pain and suffering" or "mental anguish."
- Punitive damages: additional penalties and charges the defendant must pay.
Standard liability insurance does not protect a business against:
- Claims from sexual harassment, wrongful termination of employees, failure to employ or promote, or race and gender lawsuits. These and other employee-related claims are covered by Employment Practices Liability coverage.
- Claims related to wrongful practices by professional service providers, such as consultants. Professional Liability insurance or Errors and Omissions insurance covers faulty service (errors) or failure to provide a service altogether (omission). Malpractice insurance is a specific type of professional liability policy that protects licensed professionals from liability associated with bodily injury, medical expenses and property damage, as well as the cost of defending lawsuits related to such claims.
- Claims related to crime such as theft, embezzlement, and malicious damage.
- Claims related to damages caused by computer hackers and viruses. Cyber Liability insurance covers internet business operations.
All amounts of coverage in the policy agreement, whether per person, per claim, per claimant, per occurrence, aggregate, or otherwise stated, are subject to and governed by the statutory tort liability amounts provided in Minnesota Statute 466.01 to 466.15.
Reference: Minnesota Statute, Chapter 466 – Tort Liability, Political Subdivisions
Minnesota Statute 471.345 – Uniform Municipal Contracting Law.
Minnesota Statute 471.981 – Self-Insurance Coverage by Political Subdivision.