CGL, E&O, D&O: What’s the difference?

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Commercial General Liability (CGL), Errors & Omissions (E&O), and Directors & Officers (D&O) are three types of commercial liability coverages. Professionals are often aware that they require one to all of these coverages but are unaware of the true purpose of each. The following will describe the difference between these three liability coverages.


Commercial General Liability

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CGL typically responds in cases of bodily injury, property damage, and personal injury.


  • Bodily Injury and Property Damage Liability

This coverage will pay compensatory damages to a third party because of “bodily injury” or “property damage” caused by an occurrence for which the insured is legally liable either from the operations of the business, the insured’s premises or the insured’s product.


  • Personal Injury Liability

To pay those sums that the insured is legally obligated to pay as compensatory damages because of “personal injury”. The offence must arise out of the conduct of your business excluding advertising, publishing, broadcasting or telecasting done by or for you. Personal injury offences include false arrest, detention or imprisonment; malicious prosecution; libel, slander; wrongful entry or eviction; oral or written publication of material that violates a person’s right of privacy.


  • Medical Expenses

Provides voluntary payment of all reasonable medical expense, regardless of fault, incurred on account of bodily injury caused by accident on the premises or arising from your operations.


  • Tenant’s Legal Liability

To pay those sums that the insured becomes legally liable for, due to “property damage” to premises in the care, custody or control of the insured.


Co-operators’ CGL also includes:


  • Supplementary Payments

For any claim we defend for you we will also pay:

  • All expenses that we incur
  • Costs of bonds required to defend
  • Reasonable costs incurred by you, including actual loss of earnings up to $500 a day because of time off from work
  • Costs and interest charged to you after entry of judgment


In summary, Commercial General Liability protects your business if you are found legally liable for injuries or property damage cause by your product, or accidents on your premises, your operation, or at your customer’s location.


Errors & Omissions Liability

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Originally designed for professionals like lawyers, doctors and engineers, the need for Errors & Omissions (E&O) insurance has grown with the increasing number of new occupations and higher service standards. Also known as Professional Liability insurance, E&O is a necessity for anyone who sells professional services or offers any type of consultation services.


Any person, company or partnership providing professional services for a fee can be described as a professional, especially if their occupation requires:


  • A period of technical and practical training
  • A commitment to rigorous professional guidelines, principals and service standards
  • Provincial or national regulation


Essentially, E&O responds when someone sues and feels they have suffered a financial loss as a result of something you advised them to do/or not do.


Directors & Officers Liability


Week 13 Pic 4The members of your board of directors are responsible for overseeing your business activities; they’re required to act in good faith and in the best interest of the organization. When something goes wrong and your organization faces a lawsuit, board members and other officers may be held personally responsible, to the point that their resignation or board indemnity may not be enough.


With Directors and Officers coverage, your board members are protected from exposure to lawsuits against your organization, whether it’s a family-owned business, charity group, religious or educational institution or community association. Your policy includes coverage for:


  • Financial losses resulting from an error, omission or negligent act committed by you or someone on your policy
  • Bodily injury and/or property damage if it is a direct result of a professional service
  • Legal defence costs not covered by your other insurance policies


Directors & Officers may have an exposure to personal liability in addition to exposing the organization to corporate liability.


The Key Differences


These are the essential key differences between the three coverages:


  • Commercial General Liability protects you in the event of a lawsuit due to bodily injury, property damage, and personal injury
  • Errors & Omissions Liability protects you in the event of a lawsuit due to the advice and services that you have provided.
  • Directors & Officers Liability protects you in the event that there is a lawsuit against the board of the directors of which you are/or were a member.


Email or call us anytime for more information about CGL, E&O, and D&O.



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