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  • Writer's picturejoseph retcho

What is General Liability?

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Commercial general liability (CGL) insurance protects your company in the event that someone sues it for bodily harm or property damage. Every day, your company has an impact on the lives of many people, including contractors, clients, customers, and the general public. And, at any time, one or more of these people may claim that your company has caused them bodily harm or property damage and seek legal redress. Broad range of general and commercial liability insurance solutions can help you prepare for and protect against these types of risks.

What Is Covered by Commercial General Liability Insurance?

Commercial general liability business insurance covers a wide range of claims for damages that may arise as a result of:

  • Injuries that occur on your property, such as slips and falls

  • Third-party bodily harm or property damage caused by your work, products, or employees' activities

  • Others' liability is assumed in contracts that are specifically defined.

  • Libel, slander, or commercial disparagement

  • Infringement of intellectual property rights in your advertisement

Who Should Get Commercial General Liability Insurance?

If someone could sue you for bodily harm or property damage as a result of your business operations, your employees' actions, or your services or products, you should have general liability insurance. Your insurance agency provides commercial general liability insurance options to protect against the specific risks faced by businesses in a variety of industries.

Who Is Covered by General Liability Insurance?

Commercial general liability insurance assists in covering the costs of claims made against your company by people who suffer physical injury or property damage while on your business premises, while your employees are performing their job duties, or while using your products. These expenses could include legal defense, a judgment, or a settlement. If you or your employees interact with customers in person, have access to their property, advertise or market your services, work on construction sites, or enter into contracts that require general liability coverage, commercial general liability insurance is right for you.

Small Business General Liability Insurance

As a small business owner, you run the risk of someone or another company claiming you, your product, or your employees injured or damaged them and filing a lawsuit for compensation. You would be obligated to pay those expenses out of your own business or personal assets if you did not have commercial general liability insurance.

Other reasons that small businesses require commercial general liability insurance are as follows:

  • Contractual requirements: Proof of commercial general liability insurance will be required for many contracts you sign for projects or work.

  • Lease agreements: If you rent office space, your landlord may require you to have commercial liability insurance.

  • Accreditation: If your company is certified or accredited by a professional organization, that organization may require you to keep your general liability insurance up to date in order to be licensed.

  • Permitting: Before issuing a business permit, many states or municipalities require proof of general liability insurance.

What is the cost of general liability business insurance?

The cost of commercial general liability insurance will vary according to your industry and the terms of your policy. For example, if you own a construction company, your premiums will almost certainly be higher than those of an IT consultant working from home. A variety of other factors can affect the cost of general liability insurance, including:

  • Risk exposure: Depending on the industry, your commercial general liability insurance costs may be higher or lower than the average.

  • Risk management efforts: If you take precautions to guard against risk, such as installing security systems on your premises or providing employee training programs, your liability insurance premiums may be lower than the national average.

  • Rates for commercial general liability insurance vary depending on your state, actual geographic location, and place of business.

  • Business stability: The number of years in business and your demonstrated financial stability can help you save money on commercial general liability insurance.

  • Contractual relationships: If you subcontract your work or hire third parties to perform operations on your behalf, have third-party contractors on your premises, or have leased or temporary employees, those relationships may have an impact on your GL coverage rates.

  • Claims history: Having a history of liability claims will generally result in higher commercial general liability insurance premiums.

What is the difference between commercial general liability insurance and professional liability insurance?

A commercial general liability insurance policy covers your company if it is held liable for bodily injury, property damage, personal injury, or advertising injury. Professional liability insurance, on the other hand, protects businesses and individuals from client claims for wrongful acts that result in economic damage. Both coverages can be beneficial to many businesses.

Is general liability insurance required by law?

In some cases, your company is legally required to carry general liability insurance. You may sign a contract with a client for work that requires you to prove your coverage. You can lease space, and your lease contract may require you to maintain general liability insurance while you are a tenant. If you are accredited or licensed by a professional organization, or if your state or municipality requires you to have a business permit, you may be required to show proof of general liability insurance in order to keep your license or permit. Your lender may require GL coverage if you are financing a building or equipment.

Is theft covered by general liability?

General liability insurance is intended to protect you from the costs of some of the most common business lawsuits. However, general liability insurance is not intended to cover losses incurred when your tools, equipment, inventory, or other property is stolen. Theft is protected by commercial property insurance and a combined business owners policy.

For more information, contact your insurance agency.

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