When it comes to liability insurance, it’s important to think about the unexpected. A lawsuit can be one of the most challenging events a business faces—especially when allegations involve employees, volunteers, customers, or vulnerable populations such as children or the elderly.
Even when allegations are false, defending your business can be costly. Many liability policies provide a defense when a claim is made, but the coverage that responds depends on who is making the claim, what is being alleged, and how your policy is written.
This is where coverage gaps can occur. Understanding the difference between Commercial General Liability (CGL), Employment Practices Liability Insurance (EPLI), and Abuse & Molestation coverage can help ensure your business is prepared before a claim happens.
These coverages serve different purposes. While they may overlap in some situations, each is designed to address specific types of claims. Every business is different, and the right coverage depends on the services you provide, who you serve, and the risks your team faces every day.
Breaking Down These Coverages
Commercial General Liability (CGL)
This coverage protects your business from many common liability exposures, including bodily injury and property damage claims involving customers, visitors, or other third parties.
For example, if a customer slips and falls on a wet floor at your business, your CGL policy would typically respond to that claim.
However, CGL does not cover every type of liability exposure. Many policies contain exclusions or limitations related to abuse, molestation, employment-related claims, and other specialized risks.
Employment Practices Liability Insurance (EPLI)
Workers’ compensation helps cover employees injured on the job, but it does not respond to lawsuits involving employment practices. EPLI provides protection for claims brought by employees or applicants alleging issues such as:
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Discrimination
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Harassment
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Wrongful termination
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Retaliation
Employment-related allegations can happen to any business, regardless of size or industry.
Abuse & Molestation Coverage
Businesses and organizations that work with children, elderly individuals, or other vulnerable populations may face unique risks involving allegations of abuse or inappropriate conduct.
Even when allegations are false, defending your business can be expensive. Abuse and Molestation coverage is designed to address these specific exposures and often includes a duty to defend.
Coverage options vary by insurance company and may differ in areas such as:
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Limits of coverage
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Who is protected under the policy
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How abuse is defined
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Whether defense costs are included within or outside the policy limits
Some policies are written as standalone coverage, providing additional protection without reducing other liability limits.
A Note About Umbrella and Excess Liability Coverage
An umbrella or excess liability policy increases your available limits after an underlying policy’s limits have been exhausted. However, it does not create coverage where none exists. For example, if a claim is excluded under your CGL policy, an umbrella policy generally will not provide coverage for that excluded claim.
If you have questions about your liability coverage, we’re happy to review your policies and discuss where additional protection may be needed. Contact us today.
