As a business owner, it’s important to protect your company against potential risks and liabilities. One way to do this is by purchasing commercial general liability insurance (CGL). CGL insurance provides coverage for third-party bodily injury, property damage, and personal and advertising injury claims. In this article, with Bigtipsz will discuss the basics of CGL insurance, its importance, how to obtain the right coverage for your business and related- information.
Contents
What is Commercial General Liability Insurance?
Commercial general liability insurance is a type of insurance that provides coverage for third-party claims against your business. It covers expenses related to bodily injury, property damage, and personal and advertising injury. The coverage also includes legal fees and settlements, in case your business is sued for any covered claims. The name “general liability insurance” or “business liability insurance” are other names for this coverage.
Importance of Commercial General Liability Insurance (CGL)
CGL insurance is important for all types of businesses, whether big or small. It provides protection against unforeseen accidents or incidents that may occur on your business premises, or as a result of your business operations. Without CGL insurance, your business may have to bear the full cost of damages, legal fees, and settlements, which could lead to financial ruin.
Some of the potential risks that CGL insurance covers include slip and fall accidents, product liability claims, property damage, and libel or slander lawsuits. For example, if a customer slips and falls in your store and sustains an injury, CGL insurance will cover their medical expenses and any legal fees associated with the claim.
Commercial general liability insurance also protects your business reputation. In case of a personal or advertising injury claim, such as a copyright infringement or defamation lawsuit, the coverage will help pay for legal fees and any settlement costs. This can prevent long-term damage to your business reputation, and help you recover from any losses.
Cost of Commercial General Liability Insurance
Commercial general liability insurance typically has an annual premium of $1,057, or about $88 per month. Remember that each company has distinct requirements for liability insurance. The price of your general liability insurance will vary depending on a number of variables, including:
- Type of business: Your rate may be greater the more risk your small business faces.
- Location: Your company may be less at danger in less populous places. So, this might lower your rate.
- Revenue: You might spend more to get insured coverage if your company has bigger annual revenue or sales.
- Coverage limits: Your charge will go up if you choose a bigger CGL insurance limit.
Obtaining the Right CGL Insurance Coverage for Your Business
To obtain the right commercial general liability insurance coverage for your business, you need to consider the following:
- Understand Your Business Risks: Before purchasing CGL insurance, it’s important to understand the potential risks associated with your business. This will help you determine the right coverage level and any additional endorsements you may need.
- Choose the Right Insurance Company: Choose a reputable insurance company that specializes in commercial insurance. Look for companies with good financial ratings and customer service reviews.
- Determine the Coverage Limits: Determine the appropriate coverage limits for your business. This will depend on the type of business you have, the number of employees, and the level of risk associated with your operations.
- Understand the Exclusions: Review the policy’s exclusions carefully to ensure that you understand what is not covered. Common exclusions include intentional acts, pollution, and employee injuries.
- Additional Endorsements: Consider adding additional endorsements to your policy to cover specific risks, such as cyber liability or professional liability.
Coverage Components
A commercial general liability insurance policy typically has three main coverage components:
- Bodily Injury and Property Damage: This coverage protects your business against claims related to physical injury to someone or damage to their property as a result of your business operations.
- Personal and Advertising Injury: This coverage protects your business against claims of non-physical injuries, such as defamation, false advertising, and copyright infringement.
- Medical Payments: This coverage provides reimbursement for medical expenses incurred by third parties as a result of an injury that occurred on your business premises or during your business operations.
What does commercial general liability insurance not cover?
Typically, commercial liability insurance excludes the following from its coverage:
- Contractual liability;
- Intentional criminal acts;
- Patent infringement;
- Autos or motor vehicles (you need to have commercial auto insurance); or
- You offer expert assistance or advice (you need Professional Liability Insurance).
Conclusion
Commercial general liability insurance is a critical component of any business’s risk management strategy. It protects your business from unforeseen risks and liabilities, including bodily injury, property damage, and personal and advertising injury claims. To obtain the right coverage for your business, it’s important to understand your business risks, choose the right insurance company, determine the appropriate coverage limits, review the policy exclusions, and consider adding additional endorsements. With the right CGL insurance coverage, you can protect your business from financial ruin and ensure its long-term success.
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