What is Commercial General Liability Insurance? Businesses need Commercial General Liability Insurance (CGL) to protect themselves against liability risks.
In this article, we will examine the fundamentals of CGL insurance, its importance, and the protection it provides.
Without further ado, let’s dive in!
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What is commercial general liability insurance?
Table of Contents
Commercial General Liability (CGL) insurance is a vital financial safeguard for businesses, protecting them against bodily injury, property damage, and advertising injuries.
It covers legal fees, settlements, and medical bills resulting from accidents or negligence occurring on business premises or during business operations. CGL policies usually encompass many risks, including slip-and-fall incidents, product liability, and defamation claims.
This insurance is vital for businesses to reduce potential financial burdens and legal challenges, providing a safety net that lets them focus on their operations without constant fear of unforeseen liabilities.
What does commercial general liability insurance cover?
CGL is a versatile coverage that shields businesses from different liabilities. The coverage includes:
1. Bodily Injury: CGL covers medical expenses and legal costs if an individual gets injured on the business premises or due to business operations.
2. Property Damage: It protects against financial burdens arising from damage to third-party properties caused by the business.
3. Personal and Advertising Injuries: CGL protects the business against claims related to slander, libel, copyright infringement, or false advertising, providing coverage for legal expenses.
4. Products and Completed Operations: It offers coverage for claims related to products sold or services provided. This offers protection if harm occurs or allegations of negligence arise.
5. Medical Payments: CGL often includes coverage for medical expenses if someone is injured on the business premises, regardless of fault.
It’s important to understand that there are some exclusions even though these coverages make up the majority of CGL.
There may be exclusions for deliberate actions, malpractice, and particular types of property damage. To provide proper protection, businesses need also be aware of any limits and deductibles associated with CGL coverage.
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Types of commercial general liability insurance
1. Occurrence-Based CGL
This type of CGL provides coverage for incidents that happen during the policy period, regardless of when the claim is filed. It is often preferred for long-tail claims where the effects may not be immediately evident.
2. Claims-Made CGL
This coverage responds to claims that are made during the policy period, irrespective of when the incident causing the claim occurred. It is important to maintain continuous coverage for uninterrupted protection.
3. Product Liability Insurance
Focused on brands that manufacture or sell products, this type of CGL provides coverage for claims that arise from product defects or failures that cause harm.
4. Completed Operations Insurance
Specifically for businesses involved in construction or services, this CGL covers claims that arise after a project completion. This is vital for long-term liabilities that may surface after the work is done.
5. Professional Liability Insurance (Errors & Omissions)
Though usually separate, professional liability coverage is closely related to CGL. It protects businesses from claims related to professional errors, omissions, and negligence.
6. Cyber Liability Insurance
Many businesses face cyber risks in the digital age. This type of coverage within CGL helps protect against losses and liabilities arising from data breaches and cyber-attacks.
How much does commercial general liability insurance cost?
The cost of Commercial General Liability Insurance (CGL) varies depending on factors such as the business’s size, industry, location, and coverage needs. On average, small businesses might pay premiums ranging from $500 to $3,000 annually, while larger enterprises face significantly higher costs.
High-risk businesses or those with a history of frequent claims might incur more substantial premiums. Overall, it is crucial to strike a balance between adequate coverage and budget considerations to ensure comprehensive protection against liabilities.
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The Final Thoughts
When it comes to Commercial General Liability Insurance, finding the right balance between protecting your business and managing costs is vital.
While premiums vary, investing in comprehensive CGL insurance protects your business against unforeseen challenges. Take the time to customize your policy to seek effective risk management for long-term peace of mind.
