Posted by Commercial general liability insurance coverage is a type of business insurance that covers you and your company from claims of bodily injury or property damage.
You need to understand this coverage and what it’s all about as a businessperson so that your business will be well protected and you can also maximize your productivity.
So in this thoroughly researched and well-detailed article, we’ll provide you with every piece of information you need to know about commercial general liability insurance coverage.
We’ll also provide you with tips on how to make the right decision when it comes to choosing and handling claims.
All you have to do is stick around while we walk you through this article. To start with, let’s understand what commercial general liability insurance coverage is all about.
What is Commercial General Liability Insurance?
Commercial General Liability (CGL) insurance is a type of insurance that protects your business from financial loss if you happen to become liable for property damage or personal injury caused by your services, business operations, or employees.
Understanding this coverage is an important first step in managing CGL risks, as the policy also covers legal expenses and any settlements or judgments up to the policy limits.
This type of insurance is important for any business that interacts with customers or clients, as it can protect your business from the financial impact of a lawsuit.
Who Needs Commercial General Liability Insurance Coverage?
Any business or business owner that interacts with customers or clients should consider having a CGL policy. This includes businesses such as retail stores, restaurants, manufacturers, service providers, etc.
Even if you work from home or run a small business, you could still be at risk of a lawsuit. For example, if a customer slips and falls on your property, they could sue you for damages. Can you now see how paramount it is to have this coverage?
What Does Commercial General Liability Insurance Cover?
1. Bodily Injury
Let’s assume someone injures your property as a result of your business operations. Your insurance policy will help cover the costs of their medical treatment and any legal costs if they sue you.
So we can now say that this coverage protects you against financial losses if someone is injured on your property, even if it’s not your fault.
2. Property Damage
Your insurance policy will help you pay for the cost of repairs or replacements if you happen to damage someone else’s property.
Also, it can help cover your legal costs if you’re sued as a result of the damage.
3. Personal and Advertising Injury
Let’s say you’re accused of slander, libel, or another form of personal injury. Your insurance policy can help cover the costs of your legal defense.
The same applies if you’re accused of infringing on someone else’s copyright or trademark.
4. Product Recalls
If you need to recall a product due to a defect, your insurance policy can help cover the costs of the recall. This includes the cost of notifying customers, repairing or replacing the product, and any other associated legal costs.
However, it’s important to note that this coverage does not apply to intentional recalls or to products that are recalled for safety reasons.
5. Medical Payments
This insurance takes care of the medical expenses and hospital bills assuming someone is injured on your property, regardless of whose fault it is.
But the thing is, this coverage is usually limited to smaller amounts of $5,000 or less.
How Much Does Commercial General Liability Insurance Cost?
The cost of commercial general liability insurance depends on several factors, such as the size of the business that is being insured, the riskiness of its business operations, the amount of coverage that you need, etc.
With some insurance providers, you may need to pay between $300 and $600 for a million dollars of insurance coverage.
Others may require about $1,000 a year.
Factors That Affect the Cost of Commercial General Liability Insurance Coverage
The following are the factors that affect the cost of commercial general liability insurance coverage:
1. Business size
Business size is one of the main factors that insurance companies consider when determining the cost of a commercial general liability policy.
Naturally, the larger the business, the higher the premiums. This is because larger businesses usually have more employees and assets, which means there’s a greater potential for liability claims. And vice versa.
2. Risks
Businesses that work with materials of a hazardous nature have a high tendency to pay higher premiums. The same thing applies to businesses that have a history of claims. On the other hand, businesses with low risk may pay less.
3. Business Type
Some types of businesses, like construction or manufacturing, are considered more risky than some professional services.
This is because businesses that work with dangerous materials or equipment are more likely to cause bodily injury or property damage.
4. Location
Your location is another important factor that can affect the cost of your commercial general liability policy. This is because insurance companies consider things like the crime rate and other risks in your area when determining premiums.
Let’s say, for instance, that businesses located in areas with high crime rates or natural disasters are more likely to pay more for coverage, and vice versa.
5. Claims History
Your claims history can also have a big impact on the cost of your commercial general liability policy. You have to know that just one claim is capable of increasing your premiums, so it’s important to take steps to prevent claims whenever possible.
On the other hand, businesses with a clean claim history may be eligible for discounts.
6. Credit History
If your business has a good credit history, then it can be considered a lower risk by insurance companies, which, as a result, reduces the amount of premium you get to pay.
Even if your credit score is excellent, your business credit score may be different, so it’s important to check both.
7. Discounts
Several types of discounts may be available to help you save money on your commercial general liability policy.
For example, a lot of insurance companies offer discounts for bundling your policies, such as combining your general liability policy with other types of insurance like property or workers’ compensation.
You may also be able to get a discount for having certain safety measures in place. So you just have to ask your insurance agent about any available discounts to make sure you’re getting the best possible rate.
How to File a Commercial General Liability Insurance Claim
Below are the processes involved in filing for a commercial general liability insurance claim:
Filing a general liability insurance claim is pretty straightforward.
- Firstly, you have to notify your insurance company as soon as possible after an incident occurs.
- Your insurance company will now provide you with a claim form to fill out, which you will need to complete as accurately and thoroughly as possible.
- You may also need to provide supporting documentation, such as medical records or receipts.
- Once you submit the claim, the insurance company will need to review it to determine whether it’s covered or not.
- If the claim is approved, the insurance company will provide payment for the covered costs.
FAQs on Commercial General Liability Insurance Coverage
How much does commercial general liability insurance cost?
The cost of commercial general liability insurance varies depending on factors such as your business type, location, claims history, etc.
Do you need commercial general liability insurance?
As a business owner, yes.
How much coverage do I need?
The amount of coverage you need depends on the size and type of your business.
Does commercial general liability insurance cover cyber attacks?
Commercial general liability insurance typically does not cover cyber attacks
Does commercial general liability insurance cover product liability?
Commercial general liability insurance may cover product liability in some cases. However, it's important to read your policy carefully to understand what is included.
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Conclusion
Commercial general liability insurance is an important type of insurance for businesses of all sizes. It protects your businesses against common liability risks like bodily injury, property damage, etc.
The cost of coverage varies depending on several factors, and it’s important to understand what is and isn’t covered.
By taking your time to understand your needs and shopping around for the best policy, you can protect your business and have peace of mind. Good Luck!