Comprehensive General Liability Insurance for your Business

by Rosie Esplana

September 3, 2021

Accidents, negligence, and other improper conduct can expose a company to liability in a several ways during the course of business operations. This is why many companies purchase business insurance coverage or commercial general liability insurance to protect themselves against financial losses resulting from such litigation.

Suits may get in the way of your business at any time. Especially now that people are more aware of their legal rights. Long-running and complicated cases might ultimately destroy your firm, not to mention the defense costs involved. Given the volatile nature of the corporate world, being adequately prepared for such risks is a wise decision.

CGL insurance is your company’s first line of defense against a variety of general liability lawsuits.

A commercial general liability insurance policy or a comprehensive general liability insurance policy are the most frequent insurance plans chosen by business owners before starting their business operations. The main principle behind this insurance is that it provides extensive coverage for unforeseen events that result in bodily injury or property damage to customers. In most cases, it excludes willful torts, defective construction, and consequential damages.

What this form of insurance doesn’t cover is business risk, which is often time, and time is money in construction.

What does CGL Insurance Cover?

Property Damage & Bodily Injury

Property damage is defined as “physical injury to tangible property, including resulting to loss of use.” This is according to the educational service International Risk Management Institute (IRMI). Bodily injuries often refer to physical hurt, sickness, or disease, as well as situations that result in death.

Example: A painter falls off his ladder while painting a building, resulting in a bodily injury claim.

Advertising & Personal Injury

Advertising and personal injury are insurable offenses that cause harm other than bodily injury under general liability policies, which are combined in basic CGL plans.

Examples of the claims covered by advertising and personal injury responsibility.

False arrest, detention, or imprisonment
malicious prosecution
wrongful eviction
slander, libel
invasion of privacy
copyright infringement
misleading advertising concepts

Medical Payments Coverage

This is a type of coverage that reimburses medical or funeral expenses of a third party (customer) incurred as a result of an accident, as long as the policy requirements are followed.

Liquor liability, directors and officers liability, and/or pollution liability are some other types of liability coverage to consider. An insurance company can assist you in determining which endorsements are appropriate for your particular business.

Extensions

Food Poisoning covers the insured’s liability for any poisoning caused by food or beverages sold and consumed on the insured’s property.

Elevators Hazard the liability of the insured for the use and operation of elevators and/or escalators on the insured’s property is covered.

Other essential expansions are available, depending on the nature of your firm.

Comprehensive General Liability Coverage Types

Claims-Made

A claims-made insurance protects you from liability claims that arise and are reported within the policy’s terms and conditions. Your claim can be denied if the insurance policy is cancelled. It may also not be covered if the premium is not paid even if the incident happened within the policy term.

Occurrence

A business is protected by an occurrence policy from any covered incident that occurs during the policy period, regardless of when a claim is filed. This sort of insurance will cover a company even if a claim is filed after the policy has been terminated, as long as the occurrence occurred within the policy’s time frame.

What’s the Difference Between Professional and General Liability Insurance?

As previously stated, general liability is concerned with non professional carelessness. Professional liability insurance cover instances of professional carelessness.

Professional negligence is most widespread in industries where work is evaluated using norms of conduct or standards.

Basically, general liability insurance covers you and your company for claims involving bodily injuries and property damage resulting from your products, services or operations. But professional liability insurance, also known as errors and omissions (E & O) insurance, is more commonly used to cover libel, slander, negligence, and incorrect advice.

Tip!

An insurance broker may advise you to obtain both general and professional liability coverage, depending on the nature of your firm. If you choose to utilize two different carriers and a claim is filed against your company, one of the insurers may try to shift the payout burden to the other.

Importance of Comprehensive General Liabilities

It protects the business assets

The interaction with your customers, other companies and entities, vendors, and the general public while running a business.

Human errors do happen in business; no one is perfect. Any mistakes or ignorance in business operations can lead to incidents that injure the individuals you’re interacting with (third parties). Your company will be held liable for losses if something goes wrong. Though you may be able to handle some minor claims, a large claim might cost your company a lot of money.

Customer’s Protection

Having proper insurance gives the impression to your clients that your business is well-run. Customers are more likely to trust a firm with liability insurance because they believe it will be dependable in the event of an accident. Your customers will be secured by a CGL coverage, providing them confidence and putting their minds at ease.

Assists in expanding the client base

Today’s business is fraught with danger. As a result, clients want the company to be properly insured before doing business with them. Insurance is a fantastic lifesaver for businesses that involve a significant degree of risk, such as the construction industry, and may help you beat the competition. Having proper insurance might help you attract new clients and expand your client base.

Influence

The company uses their CGL insurance to promote their business by indicating that you are licensed and covered, providing an official guarantee to your customers. Promotions like these can boost a company’s reputation, especially for small businesses.

Mindfulness

To stay stress-free as a business owner, you must first obtain commercial general liability insurance. The current corporate environment is stressful, calling the need of a safety net. For stress-free business operations that can help the company expand, general liability insurance is a must.

To summarize, any organization, regardless of its size, is exposed to liability risk. These risks cannot be avoided, but they can be managed with proper general liability insurance. Having appropriate comprehensive general liability insurance can be your most valuable asset during a crisis.