Commercial general liability insurance (CGL) protects your business in the event that someone makes a claim against it for bodily harm or property damage. On a daily basis, your company touches the lives of many people, including contractors, clients, customers and the general public. And, at any given point, one or several of these people could claim that your business has caused them bodily injury or property damage and initiate legal recourse.
What Does Commercial General Liability Insurance Cover?
Commercial general liability business insurance covers a variety of claims for damages that can result from:
- Injuries that happen on your property, such as those from slips or falls
- Bodily injury or property damage to a third party caused by your work, products or your employees' activities
- Liability of others assumed in specifically defined contracts
- Libel, slander or business disparagement
- Copyright infringement in your advertisement
Who Is Commercial General Liability Insurance Right For?
If it's possible that someone could claim bodily injury or property damage due to your business operations, your employees' actions or your services or products, you should have general liability insurance. We offer commercial general liability insurance options that protect against the unique risks of businesses in a wide range of industries.
Who Needs General Liability Insurance?
Commercial general liability insurance helps cover the costs of claims made against your business by people who experience physical injury or property damage while on your business premises, while your employees engage in their work duties, or while using your products. Those costs can include legal defense, judgment or settlement. If you or your employees interact with customers face-to-face, have access to customers’ property, advertise or market your services, work on job sites or enter into contracts that require general liability coverage, then commercial general liability insurance is right for you.
Frequently Asked Questions
How much does general liability business insurance cost?
Commercial general liability insurance costs will vary depending upon your industry and the terms of your policy. For example, if you own a construction firm, your premiums will likely be higher than those of an IT consultant with a home office. Your cost for general liability insurance can be influenced by a number of other things, including:
- Risk exposure: Depending on the industry you operate in, your costs for commercial general liability insurance can 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 training programs for your employees, your liability insurance premiums could be lower than the average.
- Location: Rates for commercial general liability insurance vary based on your state, your actual geographic location and where you conduct business.
- Business stability: The number of years you have been in business and your proven financial stability can lower your costs for commercial general liability insurance.
- Contractual relationships: If you are subcontracting your work out or hiring third parties to perform operations on your behalf, have third party contractors on your premises, or have leased or temporary employees, those relationships may affect your GL coverage rates.
- Claims history: Having previous liability claims will generally result in higher premiums for commercial general liability insurance.
How does commercial general liability insurance differ from professional liability coverage?
A commercial general liability insurance policy accounts for your business being at fault for bodily injury, property damage, personal or advertising injury. Professional liability insurance coverage, on the other hand, protects businesses and individuals against claims made by clients for wrongful acts resulting in economic damage. Many businesses can benefit from both coverages.
Is general liability insurance legally required?
There are certain instances where your business is legally required to have general liability insurance. You may sign a contract with a client for work and that contract can specify that you prove you are covered. You may lease space and your lease contract may stipulate that you retain general liability coverage while you are a tenant. If you are accredited or licensed by a professional organization or are required by your state or municipality to have a business permit, you may need to show proof that you are covered by general liability insurance in order to keep your license or permit. If you are financing a building or equipment, your lender may require GL coverage.
Does general liability cover theft?
General liability insurance is designed to protect you from the expenses from some of the most common lawsuits that arise from doing business. But general liability insurance is not designed to protect against losses that happen when your tools, equipment, inventory or other property are stolen. Commercial property insurance as well as a combined business owners policy protect against theft.
As a small business owner, you run the risk of a person or another business claiming you, your product or your employees caused them injury or damage and initiating a lawsuit for damages. Without commercial general liability insurance, you would be liable to pay those expenses with your own business or personal assets.
Other reasons why small businesses need commercial general liability insurance include:
- Contractual requirements: Many contracts you sign for projects or work will require proof of commercial general liability insurance.
- Lease agreements: If you rent your office space, your landlord may require you to have business liability insurance.
- Accreditation: If your business is certified or accredited by a professional organization, that organization may require you keep your general liability coverage current for licensure.
- Permitting: Many states or municipalities require proof of general liability insurance before providing your business permit.