Why is Commercial General Liability Insurance Important for Your Business?
Commercial general liability (CGL) insurance is a vital component of your complete business insurance package. It protects your company’s assets by providing protection for liability claims against your business. These can be claims that arise from injuries or property damage that occur on your business property, or those that are caused by you or your employees while doing business. CGL insurance pays for attorney fees and any judgments you might have to pay if you are sued, and it also provides coverage for claims of libel, slander, copyright infringement and false advertising.
Not every type of liability exposure is covered by a commercial general liability policy. CGL policies cover three types of business liability exposures:
- Bodily injury and property damage related to the ownership and maintenance of the business premises, or as the result of operations conducted both at and away from the business premises
- Bodily injury or property damage that result from faulty products or completed operations (work performed by your business)
- Negligent actions of independent contractors and subcontractors that you hire
There are three types of claims for which you will receive payment from the insurance company:
- Accidental bodily injury or property damage that your business is legally responsible for
- Personal injury or advertising injury that the business is found legally responsible for
- Medical expenses for individuals injured on the premises of the business or by the business operations, regardless of fault
While they are your first line of defense against liability claims against your business, CGL policies do not provide coverage for directors and officers liability, professional liability, employment practices liability, liquor liability, employee benefits liability, and workers’ compensation. You will need to buy additional policies or add endorsements to your CGL policy for these kinds of coverage.
Every business, regardless of size, is vulnerable to lawsuits and the costs associated with being responsible for injuries to others. CGL insurance provides the protection you need.