Final answer:
A Commercial General Liability (CGL) policy typically covers a corporation's employees, shareholders when in official capacity, and potentially affiliated nonprofit organizations, but it does not usually cover independent contractors. Independent contractors are expected to have their own liability insurance, as they operate separately from the hiring company.
Step-by-step explanation:
A Commercial General Liability (CGL) policy provides liability insurance coverage for a wide range of persons associated with the insured entity. However, there are specific exceptions regarding who is covered under such a policy. The standard CGL policy is designed primarily to protect the insured business itself and, by extension, certain individuals or entities that have a direct relationship with the business operations.
Generally, a CGL policy covers a corporation's employees while they are on company premises because they are considered part of the operations covered by the policy. Likewise, shareholders of the insured corporation may be covered when acting within their capacity related to the business. Even nonprofit organizations affiliated with the insured might receive coverage if they are directly involved in the insured's business activities and this coverage is specified in the policy.
However, independent contractors hired by the insured are typically not covered by the insured's CGL policy. These contractors are generally expected to carry their own liability insurance because they operate as separate entities and have control over their work processes, which separates their liability from that of the hiring company. As such, the correct answer to the question would be option 2: Independent contractors hired by the insured.