Commercial General Liability Insurance
What is Commercial General Liability Insurance?
By: Allen Financial Insurance Group
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Commercial General Liability Insurance Protects Your Business From Common Liabilities.
Your business faces liabilities every day. The only way to protect your assets is to carry adequate business liability insurance. A Commercial General Liability (CGL) insurance policy is the first line of defense against many common claims.
General Liability insurance covers claims of bodily injury or other physical injury or property damage. It is frequently offered in a package with Property insurance to protect your business against incidents that may occur on your premises or at other covered locations where you normally conduct business. Commercial General Liability enables your business to continue operations while it faces real or fraudulent claims of certain types of negligence or wrongdoing.
4 Ways General Liability Insurance Can Protect Your Business
Commercial General Liability – The Most Basic Form of Business Insurance
If you have only one form of business insurance, it is most likely Commercial General Liability. CGL policies cover claims in four basic categories of business liability:
Third-Party Bodily Injury (e.g., slip-and-falls)
If a customer is hurt on your property, General Liability Insurance can help pay for their immediate medical expenses or your legal expenses when they sue.
Third-Party Property Damage (e.g., ruined customers laptop)
If you damage customer property, General Liability Insurance can help pay to repair or replace it.
Advertising Injury (e.g., copyright infringement)
If someone sues you over slander or copyright infringement, General Liability Insurance can help pay for lawsuit expenses.
Product Liability (e.g., cracked tea kettle that causes burns )
If your product hurts someone or damages their property, General Liability Insurance can help pay for your legal expenses.
In addition to covering the claims listed above, Commercial General Liability policies also cover the cost to defend or settle claims – even if the claims are fraudulent.
Business Liability insurance protects your business against financial loss resulting from claims of injury or damage caused to others by you or your employees. (Some coverage may not be available on all policies or in all states.)
Automatic Additional Insured: Coverage is automatically provided when required in a written contract, agreement or permit.
Personal and Advertising Injury: Covers you for certain offenses you or your employees commit in the course of your business, such as libel, slander, disparagement, or copyright infringement in your advertisements.
Employment Practices Liability: Covers claims, including legal defense costs, for certain employment-related lawsuits brought against you by your employees or job applicants ($5,000 limit where available).
Defense Costs: Pays legal expenses for certain liability claims brought against your business regardless of who’s at fault.
Medical Expenses: Pays the applicable medical costs if someone is injured and needs medical treatment due to an accident on your premises.
Premises and Operations Liability: Provides coverage for bodily injury and property damage sustained by others at your premises or as a result of your business’ operations.
Tenant’s Liability: Protects your business against claims of damage due to fire or other covered losses caused by you to premises that you rent.
Note: This summary outlines in general terms the coverages afforded under some policies. Examine the policy carefully for any exclusions, limitations, or any other terms or conditions that may specifically affect coverage. The terms and conditions of the policy prevail.
Why Do I Need Business Liability / Commercial General Liability Insurance?
Business Liability Insurance Keeps You In Business
Every business benefits from adequate Commercial General Liability coverage. Commercial General Liability insurance protects you if a customer is injured at your place of business. It would also cover damage or injuries caused by your employees at a client’s site.
Commercial General Liability protects businesses against these types of claims. Even if your company is negligent or liable for damage, injury or loss to another’s property, reputation or health, your business can keep its assets if it is adequately insured.
Commercial General Liability Only Protects Against Some Business Liabilities.
Even as a BOP (Business Owner’s Package), where CGL insurance is combined with Property insurance at very reasonable rates, General Liability insurance does not protect your business against every liability. If you or your employees make professional judgments and recommendations in the course of your business, ask your agent or broker about a Professional Liability policy in addition to a CGL policy.
Professional Liability insurance (also known as Errors and Omissions, or E&O coverage) is a separate type of insurance that protects your business against loss from a claim of alleged negligent acts, errors or omissions in the performance of your professional services. Professional Liability insurance is another important type of coverage to protect your business from potentially catastrophic claims.
General Liability and Property Package
General Liability and Property Package coverage is the most basic type of commercial insurance and is limited to liability claims of bodily injury or property damage. Coverage is provided for accidents on your premises or at your customer’s location. Some client contracts also refer to these policies as Comprehensive Commercial Liability.
Typically offered as a general liability and property package policy, coverage is also provided for theft or destruction of your company’s computer hardware and software and other assets (see property coverage) such as office furnishings and equipment up to a specified amount.
General liability coverage may be described in your contract in this way:
“Supplier will maintain at its expense Comprehensive General Liability Insurance. Commercial General Liability Insurance policy limits shall be not less than a Combined Single Limit for Bodily Injury, Property Damage, and Personal Injury Liability of $1,000,000 per occurrence and $2,000,000 aggregate.”