Commercial General Liability Insurance Guide

Commercial General Liability Insurance - introduction

As a business owner, you likely engage with a lot of people throughout the course of your day. What would you do if one of them accuses your business of injuring them physically, personally, or professionally — then decides to take legal action against you?

Unfortunately, this scenario plays out all too often, and it’s one that not all business owners are prepared to deal with. If you find yourself in the position of needing to defend yourself and your business against claims of libel, physical injury, or something else, you need business General Liability (GL) insurance.

All businesses should have this coverage, regardless of size. This article briefly explains what business General Liability insurance is, who needs it, what it covers, and how much it costs.

What is General Liability insurance?

A commercial General Liability insurance policy provides indemnity against the risks that nearly all business owners face. It protects your business assets from any claims of injury as it relates to your business and respond to claims of negligence made by a third party.

The court costs alone from even one lawsuit could be financially devastating to most small businesses. Commercial General Liability insurance can provide you with unlimited defense (per occurrence aggregate applies to settlements only) and with the resources to keep your business operating even in the midst of a lawsuit.

Most GL policies also include some form of product liability coverage as well. This covers you if a customer claims that your product or service injures them in some way.

Do you need commercial General Liability insurance?

If you are a business owner who deals with and employs other people in some way, you need commercial General Liability insurance. Even if you think you’re unlikely to face a lawsuit, insurance is always a wise (and fairly affordable) investment. Few people regret buying insurance but many people regret not buying it.

As a business owner, you have enough to worry about. You don’t need to add situations which are out of your control. Business General Liability insurance can give you peace of mind by helping you manage your business risks.

The type of coverage you need depends on your industry, so it’s important to talk to someone who understands your industry and your business’s specific needs.

What does Commercial General Liability insurance cover?

Business General Liability insurance covers third-party lawsuits that stem from property damage or injuries. Here is a closer look at some of the main areas business General Liability insurance covers:

  • Bodily injuries: depending on your business, you may have a hard time imagining a situation where a customer or employee could be seriously or fatally injured but it could happen. If it were to happen your General Liability insurance covers any related medical costs.
  • Property damage: it is possible that the actions or inactions of your business could cause damage to another person’s property. In this scenario, your General Liability insurance would compensate both the damage and any loss of use.
  • Operational costs: if your company produces products then General Liability insurance covers any injuries that could occur as a result of your product.
  • Legal expenses: if your company got sued, the costs associated with hiring a legal team and defending yourself in court can be huge, even if the lawsuit is ultimately unsuccessful. A lawsuit can also damage your reputation and hinder revenue. General Liability insurance would pay for all the court costs, possible loss of income, and settlements resulting from the suit.
  • Personal injury: you could find yourself in a situation where someone claims you personally injured them in some way. Your General Liability insurance would protect you against any lawsuits involving claims of libel, slander, violating another person’s privacy rights, or unlawfully evicting someone.

Commercial General Liability insurance examples

  • Starbucks and several other corporations are being sued in excess of $50,000 due to an incident that occurred at Rosemont’s Fashion Outlets of Chicago.
  • A woman who tore her hamstring after slipping on a wet floor at a Target store awarded $2.1 million. She was injured after slipping and falling on a recently mopped floor in an Allegheny County Target on Dec. 14, 2013, while shopping for goods for her co-workers.
  • In 2011, Anthony Zaccaglin and his wife were awarded $7.5 million after Zaccaglin slipped on the floor of a San Diego-area Starbucks and knocked his head on the cash register. The floor was slick because of employee negligence, as a barista had just mopped the area without placing a cone close enough to the affected area.

How much does Commercial General Liability insurance cost?

One of the biggest factors that determines the cost of General Liability insurance is your specific industry and business. If you’re a freelance contractor who works from home, chances are you interact with far fewer people than a convenience store owner. In general, the construction industry tends to pay some of the highest rates for insurance because they usually do work on other people’s properties.

Your business is unique and your coverage needs are as well. The types of services you offer, how many employees you have, and the types of risks they face all contribute to the cost of your premiums. And as with anything in life, you get what you pay for. If you want a General Liability insurance policy with a high coverage limit then you should expect to pay more for it.

Commercial General Liability insurance - conclusion

For every risk you can imagine facing a business owner (and surely you’ve imagined several), there’s an insurance policy you can buy to plan for it. Business General Liability insurance is a necessity for all business owners, but it’s not the end-all-be-all — you can greatly benefit from other policies as well.

Chat with us to learn more about your General Liability needs.

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P.S. Check out our blog or our Insurance Guide Section to learn even more.