Key Takeaways
- Commercial General Liability (CGL) protects businesses from third-party bodily injury and property damage claims
- DC requires workers' compensation for employers with 1 or more employees
- Professional liability (E&O) insurance is essential for service professionals
- Umbrella and excess liability policies provide additional protection above underlying limits
- DC's urban environment creates unique liability exposures for businesses
Last updated: January 2026
DC Liability Insurance
Commercial General Liability (CGL)
Commercial General Liability insurance is fundamental protection for DC businesses against third-party claims.
CGL Coverage Structure
The standard ISO CGL policy includes three main coverage parts:
Coverage A - Bodily Injury and Property Damage Liability
| Feature | Details |
|---|---|
| Covered Claims | Third-party bodily injury and property damage |
| Trigger | Occurrence-based (injury/damage during policy period) |
| Defense Costs | Paid in addition to policy limits |
| Typical Limits | $1M per occurrence / $2M aggregate |
Coverage A Examples:
- Customer slips and falls in your store
- Your employee damages client property during service call
- Product you sell causes injury to consumer
- Operations cause property damage to neighbor
Coverage B - Personal and Advertising Injury Liability
| Feature | Details |
|---|---|
| Covered Claims | Non-physical injury claims |
| Trigger | Offense committed during policy period |
| Typical Limits | Often shares aggregate with Coverage A |
Coverage B Offenses Include:
- Libel and slander
- False arrest or detention
- Malicious prosecution
- Wrongful eviction
- Copyright infringement in advertising
- False advertising
Coverage C - Medical Payments
| Feature | Details |
|---|---|
| Covered Claims | Medical expenses for injured third parties |
| Trigger | Injury on premises or from operations |
| Typical Limits | $5,000 - $10,000 per person |
| Fault Requirement | No fault required (goodwill coverage) |
CGL Policy Limits Structure
| Limit Type | Purpose | Typical Amount |
|---|---|---|
| Per Occurrence | Maximum for any single occurrence | $1,000,000 |
| General Aggregate | Maximum for all claims in policy period | $2,000,000 |
| Products-Completed Operations | Separate aggregate for product/completed operations | $2,000,000 |
| Personal & Advertising Injury | Per person/organization limit | $1,000,000 |
| Damage to Rented Premises | Fire damage to rented premises | $100,000 - $500,000 |
| Medical Payments | Per person medical expenses | $5,000 - $10,000 |
Key CGL Exclusions
| Exclusion | Description |
|---|---|
| Expected/Intended Injury | Intentional acts not covered |
| Contractual Liability | Most contractual assumptions excluded (exceptions apply) |
| Workers' Compensation | Employee injuries covered under WC, not CGL |
| Pollution | Most pollution excluded (buy separate coverage) |
| Professional Services | Errors in professional services excluded (buy E&O) |
| Auto Liability | Covered under auto policy, not CGL |
| Liquor Liability | Excluded unless specific endorsement purchased |
| Employment Practices | Discrimination, harassment excluded (buy EPLI) |
Exam Tip: CGL covers third-party claims only. Employee injuries are covered by workers' compensation, not CGL. Professional errors require separate E&O coverage.
DC Workers' Compensation Insurance
DC Workers' Compensation Requirements
DC has one of the strictest workers' compensation requirements in the nation:
| Requirement | DC Rule |
|---|---|
| Coverage Required | For employers with 1 or more employees |
| Domestic Workers | Covered if working 240+ hours/quarter |
| Corporate Officers | May elect to be excluded |
| Sole Proprietors | May elect coverage |
| Penalties | $1,000 per day uninsured + criminal prosecution |
Critical: DC requires workers' compensation for ANY employer with at least ONE employee. This is stricter than most states, which often exempt employers with fewer than 3-5 employees.
DC Workers' Compensation Benefits
| Benefit Type | Coverage Details |
|---|---|
| Medical Benefits | 100% of reasonable medical expenses (no deductible) |
| Temporary Total Disability (TTD) | 66 2/3% of wages, max $1,913.88/week (2026) |
| Temporary Partial Disability (TPD) | 66 2/3% of wage difference during light duty |
| Permanent Total Disability (PTD) | 66 2/3% of wages for life |
| Permanent Partial Disability (PPD) | Scheduled benefits based on body part/impairment |
| Death Benefits | Spouse: 50% of wages; Children: additional percentages |
| Vocational Rehabilitation | Retraining for return to work |
DC Workers' Compensation Waiting Period
| Period | Duration | Details |
|---|---|---|
| Waiting Period | 3 days | Benefits begin after 3 days of disability |
| Retroactive Period | 14 days | If disabled 14+ days, benefits paid from day 1 |
Exclusive Remedy Doctrine
DC workers' compensation is the exclusive remedy for workplace injuries:
| Principle | Application |
|---|---|
| No Lawsuit Against Employer | Employees cannot sue employer for work injuries |
| Exceptions | Intentional injury by employer, third-party claims |
| No-Fault System | Benefits paid regardless of who was at fault |
| Employer Protection | Shields employer from tort liability |
DC Office of Workers' Compensation (OWC)
| Function | Details |
|---|---|
| Administers DC WC Law | Oversees all workers' compensation matters |
| Dispute Resolution | Hearings for contested claims |
| Employer Compliance | Ensures employers maintain coverage |
| Benefit Calculations | Determines benefit amounts |
| Contact | (202) 724-7000 |
Professional Liability Insurance
Errors and Omissions (E&O) Insurance
Professional liability insurance protects service professionals from claims of negligence, errors, or omissions:
| Feature | Details |
|---|---|
| Coverage Trigger | Claims-made (claim filed during policy period) |
| What's Covered | Negligent acts, errors, omissions in professional services |
| Defense Costs | Usually within policy limits |
| Typical Limits | $1M per claim / $3M aggregate |
Professionals Needing E&O in DC
| Profession | Key Exposures |
|---|---|
| Insurance Producers | Failure to procure coverage, bad advice |
| Real Estate Agents | Misrepresentation, failure to disclose |
| Accountants | Tax errors, audit failures |
| Attorneys | Malpractice, missed deadlines |
| Consultants | Bad advice, project failures |
| Technology Companies | Software failures, data breaches |
| Architects/Engineers | Design defects, specification errors |
Claims-Made vs. Occurrence Coverage
| Feature | Claims-Made | Occurrence |
|---|---|---|
| Trigger | Claim filed during policy period | Injury/damage during policy period |
| Retroactive Date | Coverage limited to claims from acts after retro date | No retroactive date limitation |
| Tail Coverage | May need extended reporting period (ERP) | Not needed |
| Premium Pattern | Increases annually until mature | More level premiums |
| Common Usage | Professional liability | CGL, property |
Exam Tip: Professional liability is typically claims-made. Producers changing policies should understand retroactive dates and the need for tail coverage to avoid gaps.
Directors and Officers (D&O) Liability
D&O Coverage for DC Organizations
| Feature | Details |
|---|---|
| Who's Covered | Directors, officers, sometimes employees |
| What's Covered | Wrongful acts in capacity as D&O |
| Coverage Trigger | Claims-made |
| Three Insuring Agreements | Side A, Side B, Side C (entity coverage) |
D&O Wrongful Acts Include
- Breach of fiduciary duty
- Mismanagement
- Failure to comply with regulations
- Employment practices violations (if included)
- Securities violations
- Conflicts of interest
- Negligent oversight
DC Nonprofit D&O Considerations
| Consideration | Details |
|---|---|
| Volunteer Protection | DC law provides some volunteer immunity |
| Board Service | Personal assets at risk without D&O |
| Employment Claims | Common source of nonprofit D&O claims |
| Fundraising Issues | Donor restrictions, misuse of funds |
Employment Practices Liability Insurance (EPLI)
EPLI Coverage
| Feature | Details |
|---|---|
| What's Covered | Employment-related claims by employees |
| Coverage Trigger | Claims-made |
| Defense Costs | Usually within policy limits |
| Deductible | Often $10,000 - $50,000 |
EPLI Covered Claims
- Sexual harassment
- Discrimination (race, gender, age, disability, religion)
- Wrongful termination
- Retaliation
- Failure to promote
- Hostile work environment
- Wage and hour disputes (if endorsed)
DC Human Rights Act Considerations
DC has robust anti-discrimination laws under the DC Human Rights Act:
| Protected Class | DC Protection |
|---|---|
| Standard Protected Classes | Race, color, religion, national origin, sex, age, disability |
| Additional DC Protections | Sexual orientation, gender identity, marital status, family responsibilities, political affiliation, personal appearance, genetic information, matriculation, credit information |
Exam Tip: DC's Human Rights Act is one of the most comprehensive anti-discrimination laws in the nation, creating significant EPLI exposures for DC employers.
Umbrella and Excess Liability Insurance
Umbrella Liability
| Feature | Details |
|---|---|
| Function | Provides additional limits above underlying policies |
| Underlying Policies | CGL, auto liability, employers liability |
| Drop-Down Coverage | May cover claims excluded by underlying policies |
| Typical Limits | $1M - $25M+ |
| Self-Insured Retention | Applies when umbrella drops down |
Excess Liability
| Feature | Details |
|---|---|
| Function | Follows form of underlying policy |
| No Broader Coverage | Only increases limits, no drop-down |
| Premium | Generally lower than umbrella |
| Claims Handling | Underlying insurer typically handles |
When DC Businesses Need Umbrella/Excess
| Business Type | Recommended Limit |
|---|---|
| Small Retail | $1M - $2M umbrella |
| Professional Services | $2M - $5M umbrella |
| Contractors | $5M - $10M umbrella |
| Federal Contractors | $5M - $25M+ (contract requirements) |
| Transportation Companies | $5M+ excess |
DC-Specific Liability Considerations
Federal Government Contractor Liability
| Consideration | Details |
|---|---|
| Contract Requirements | Often require specific insurance limits |
| Security Clearances | May require cyber liability coverage |
| Sovereign Immunity | Federal government immune from some claims |
| False Claims Act | Exposure for fraudulent billing |
Embassy and International Organization Liability
| Consideration | Details |
|---|---|
| Diplomatic Immunity | May limit ability to pursue claims |
| Foreign Workers | Special workers' compensation considerations |
| International Events | Host liability for international functions |
Urban Premises Liability
| Exposure | DC Consideration |
|---|---|
| Sidewalk Liability | Property owners may be liable for adjacent sidewalks |
| Snow/Ice Removal | Must clear within specific timeframes |
| Street Trees | Maintenance responsibility issues |
| Construction Sites | High pedestrian traffic increases exposure |
| Special Events | Permits and insurance requirements |
Liquor Liability in DC
DC Dram Shop Law
DC does not have a traditional dram shop law, but businesses serving alcohol face liability:
| Liability Type | Exposure |
|---|---|
| Negligence | Serving visibly intoxicated persons |
| Minor Service | Serving alcohol to minors |
| Over-Service | Continuing to serve impaired patrons |
| Host Liability | Social hosts may have limited liability |
Liquor Liability Coverage
| Feature | Details |
|---|---|
| CGL Exclusion | Standard CGL excludes liquor liability for businesses selling alcohol |
| Endorsement Needed | Must add liquor liability endorsement |
| Typical Limits | $1M per occurrence |
| Premium Factors | Alcohol sales percentage, hours of operation, history |
Test Your Knowledge
How many employees must a DC employer have before workers' compensation is required?
A
B
C
D
Test Your Knowledge
What type of coverage trigger is typically used for professional liability (E&O) insurance?
A
B
C
D
Test Your Knowledge
Which of the following is NOT typically covered by a standard CGL policy?
A
B
C
D