Commercial general liability insurance is a fundamental and essential component of every business’s risk management strategy. Irrespective of the industry type and size, businesses are exposed to a wide variety of risks that can result in liabilities. CGL policy coverage gives protection to businesses against a range of liability exposures. Commercial general liability insurance is designed to protect the insured business from financial losses associated with bodily injury, property damage, personal injury, and advertising injury claims made by third parties.
What is general liability insurance coverage for business?
Commercial General Liability insurance is crucial for businesses for several reasons as it gives comprehensive protection against various liabilities arising from third-party claims. The following are the coverages provided under commercial general liability insurance:
Coverage for bodily injury and property damage
Commercial general liability policy protects against claims arising from third parties (not employees) on physical injuries caused. The coverage includes legal defence, medical expenses, and any other cost if the business is found responsible for the bodily harm. This insurance also covers damages to third-party property caused by the business operations. This can include damage to a customer’s property or damage that occurs on rented premises.
Personal and advertising injury coverage
Commercial general liability insurance often includes coverage for personal and advertising injuries. This includes false arrest, libel, slander, malicious prosecution, infringement of copyright, and more. This protects businesses from claims related to non-physical injuries caused due to promotional or advertising activities carried out by the business.
Medical expenses cover in Commercial General Liability Insurance
Commercial general liability policy may include coverage for medical expenses incurred by individuals who suffered an injury due to business operations. This coverage is typically provided regardless of who is at fault.
Coverage for legal defence
Commercial general liability policy covers the cost of legal defence, including attorney fees, court costs, and settlements. This is crucial in the event of a lawsuit, as legal expenses can be substantial.
Products and completed operations coverage
This coverage offered by CGL policy is crucial for businesses that manufacture, distribute, or sell products. It provides protection against claims arising from defective products or completed projects that later result in injury or property damage.
Commercial general liability insurance provides comprehensive financial coverage to businesses against various risks. However, it is important for businesses to carefully review the policy before they buy and understand what is excluded. Some general exclusions in the policy are:
- Coverage for professional errors or omissions
- Deliberate or intentional acts that result in harm
- Coverage for bodily injury or property damage caused to employees
- Liabilities arising from the use of vehicles
- Contractual liability
- Pollution-related liabilities
- Coverage for costs associated with product recalls
- Loss or damage resulting from war, terrorism, or acts of terrorism may be excluded.
- Data breaches and other cyber-related liabilities
- Claims related to employment practices such as wrongful termination, discrimination, or harassment.
How Much commercial general liability insurance do I need?
Determining the right amount of commercial general liability cover for any business involves assessing various factors. This includes some of the critical factors like the size of the business, nature, industry, location, industry-specific risks, and more. related to the nature of the business, its size, industry, location, and potential risks. Coverage requirements can vary depending on the insurance needs which can vary significantly from business to business.
Businesses need to consider every factor while assessing their insurance needs. It is important to seek professional help that can help them customise the coverage as per their unique insurance needs. It is vital to regularly review and reassess the insurance needs of the business, especially as it grows or undergoes changes.
Conclusion
To sum up, commercial general liability insurance is an important necessity for businesses of all sizes and industries. It helps them protect their assets and provides financial support in the face of unforeseen liabilities and legal claims. The specific coverage and limits of the policy may vary depending on the insurer and the needs of the insured business. It allows businesses to operate with greater peace of mind without having to worry about potential risks.
