Commercial General Liability Insurance (CGL): What You Need To Know

Running a business comes with inherent risks, and it’s crucial to protect yourself and your company from potential financial losses. One way to safeguard your business is by obtaining commercial general liability (CGL) insurance. In this article, we will explore the key aspects of CGL insurance, including what it covers, why it is essential, and how much it may cost. 

What is Commercial General Liability Insurance?

Commercial general liability insurance provides coverage against claims of bodily injury, property damage, and advertising or personal injury. It is designed to protect your business from financial losses that may arise from accidents, negligence, or legal claims. 

Bodily injury refers to physical harm caused to a third party, such as a customer slipping and falling in your store. Property damage involves any damage caused to someone else’s property due to your business operations. Advertising or personal injury includes claims of libel, slander, copyright infringement, or false advertising. 

Why Do You Need Commercial General Liability?

Commercial general liability insurance is essential for several reasons: 

• Legal protection: In today’s litigious society, businesses are vulnerable to lawsuits. Regardless of the size or nature of your business, an accident or allegation of negligence can lead to costly legal battles. CGL insurance provides legal defense and financial coverage if you are sued for covered claims. 
• Customer trust: Having CGL insurance demonstrates to your clients and customers that you are a responsible business owner who is prepared for unforeseen events. It can enhance your credibility and attract more customers. 
• Contractual requirements: Many contracts, especially those with larger clients or government entities, require businesses to carry general liability insurance. By having CGL coverage, you can meet these contractual obligations and secure valuable business opportunities. 
• Peace of mind: Knowing that you have adequate insurance coverage in place allows you to focus on running your business without constant worry about potential liabilities. CGL insurance provides peace of mind, knowing that you are financially protected against unforeseen incidents. 

Are Commercial General Liability and Business Liability the Same?

While the terms “commercial general liability” and “business liability” are often used interchangeably, they do have some distinctions. Commercial general liability insurance is a specific type of business liability insurance that provides broad coverage against common risks. It typically covers bodily injury, property damage, and personal/advertising injury.

On the other hand, business liability insurance is a broader term that encompasses various types of insurance policies designed to protect businesses. These policies may include commercial property insurance, professional liability insurance, product liability insurance, and more. Therefore, CGL insurance is a component of business liability insurance, providing coverage for specific risks. 

What Does Commercial General Liability Insurance Cover?

Commercial general liability coverage typically includes the following:

• Bodily injury and property damage: If a third party sustains physical injuries or their property is damaged due to your business activities, CGL insurance can cover medical  expenses, legal defense costs, settlements, or judgements. 
• Personal  and advertising injury: CGL insurance  can protect you if someone alleges that your business caused them harm through libel, slander, copyright infringement, or false advertising. It covers legal expenses and potential damages. 
• Products and completed operations: If your business sells products or provides services, CGL insurance can provide coverage if a product defect or inadequate service leads to bodily injury or property damage. It includes the cost of legal defense and potential compensation.
• Medical payments: CGL insurance can cover medical expenses if a third party sustains an injury on your business premises, regardless of fault. It offers a goodwill gesture and can help prevent potential lawsuits. 

It is important to note that CGL insurance coverage may have certain exclusions and limitations, so it’s crucial to review your policy and understand the terms and conditions. 

How Much Does Commercial General Liability Insurance Cost?

The cost of commercial general liability insurance depends on various factors, including the size and nature of your business, industry risks, location, coverage limits, and deductible amount. On average, small businesses can expect to pay between $500 and $3,000 per year for CGL insurance. However, this estimate may vary significantly based on individual circumstances. 

To determine the precise cost, it’s advisable to obtain quotes from different insurance providers. Consider working with an insurance agent or broker specializing in commercial insurance to ensure you get the coverage you need at a competitive price. 

In conclusion, commercial general liability insurance is a vital investment for businesses of all sizes and industries. It provides financial protection and peace of mind by covering claims related to bodily injury, property damage, and personal or advertising injury. By understand the scope of coverage and obtaining the right policy for your business, you can safeguard your company  against potential liabilities and focus on its growth and success. 

Let us help you protect your business with general liability insurance and keep your mind at ease. At Tivly, our goal is to help you find protection for your business as efficiently as possible by matching you with the right insurance provider. Simply give us a call at 877-907-5267 or complete the form above and one of our specialists will contact you right away.

Reviewed By: Sarah Reid, Licensed Agent

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