Commercial General Liability Insurance
Commercial General Liability Insurance. Would you be protected if somebody was injured or otherwise felt that your business had wronged them? That's not a question that most business owners want to consider, but it's important that they do. The fact is that we live in a society that is very litigious. People often don't take responsibility for their own actions, and they are quick to place blame when they don't get the outcome they want.
Carrying adequate commercial general liability insurance to protect your business isn't an option - it's your responsibility, and a must if you want to make sure that you don't get put in a position where you have to pay money out of pocket to cover expenses associated with a loss.
Understanding commercial general liability insurance is vital to protect your business from lawsuits for bodily injury or property damage. Learn how a CGL policy can shield your business from real or frivolous claims.
The Importance of CGL Insurance
Insurance requires you to make a investment up front in the form of premiums as a way of protecting yourself against the possibility of a large loss at some point in the future. Many businesses owners, especially those running on a razor-thin margin, might be tempted to skimp on commercial general liability insurance because they want to save money. However, that's a decision that can end up costing you everything in the long run.
Depending on the type of business you own, you might need to buy several business insurance policies to protect yourself. However, every business should consider commercial general liability insurance.
What Is Commercial General Liability Insurance?
The first step is making sure that you have a full and clear understanding of what commercial general liability insurance is and how it works. The word “liability” is basically a synonym for responsibility. In certain cases, you - as a business owner - may find yourself in a situation where you are responsible for things that happen on your property, whether you own it or rent it.
Commercial general liability insurance is insurance that covers you in the event that something happens at your business for which you are partially or totally responsible. For example, if a customer goes into a grocery store and slips and falls on a wet floor, the store's general liability insurance would cover them in the event that the person who fell was injured.
The insurance helps to protect your company's assets if something happens. If you didn't have it, you might end up having to dip into your company's assets to pay for medical expenses, legal expenses, and so on. With that insurance in place, you will need to pay for your premiums and a deductible, but after that, the insurance company will pay your expenses up to the policy's limits.
How Commercial General Liability Insurance Works
Simply put, commercial general liability insurance works by allowing you to continue to do business even if you find that you are caught up in a lawsuit. You won't have to worry about your assets being frozen to cover liability because the insurance will take care of that for you.
Here are some of the general categories of costs that can be covered by commercial general liability insurance:
- Legal costs associated with investigating or defending a suit filed against you, including attorneys' fees, court costs, and witness fees.
- Income you lose as a result of having to defend yourself against a suit.
- Judgments or settlements to be paid in the event that you lose a suit against you or choose to settle it out of court.
- Premium on any court-mandated bonds related to a suit against you.
In addition to covering you as a business owner, your CGL policy will cover the following people:
- If your company is a corporation, it will cover all executive officers, stockholders and directors if they are acting within their official capacity.
- If your company is a general partnership or joint venture, all partners, members, and their spouses will be covered if they get sued for something related to your business.
- All of your employees will be covered for losses related to their duties as employees.
- If you have subsidiary companies, most policies will cover those companies if you own at least 50% of the stock.
- Some companies have written indemnifications to protect vendors who sell their products from damages related to the products - in such cases, the vendors would also be covered by your policy.
- Volunteers who do work on your behalf would be covered for losses or liabilities incurred while they were volunteering for you.
As you can see, the scope of commercial general liability insurance can be fairly broad and can protect your company in a variety of ways.
Other Things Covered by General Liability Insurance
In addition to the things I have listed above, general liability insurance may also include coverage for other things if you choose to add them. These things may be included as part of your policy, or they may be added as riders or additional coverage in some situations.
- Bodily injury and death - if someone is injured or killed as a result of something related to your business, you would be covered for medical expenses, loss of services, and court-ordered compensation for an accidental death.
- Property damage - if someone's personal or business property is damaged in the course of your business, your general liability coverage would protect you and pay for both physical damage to the property and loss of use.
- In the event that one of your products malfunctioned or caused an injury, your completed products coverage would protect you from any suits related to the damage.
- Contractual liability - your company might take on additional liability by signing a contract, such as a maintenance contract, a building lease, or a municipal indemnification.
- Liquor liability - if you serve alcohol at occasional company functions, such as summer outings or holiday parties, you will be covered for liability related to the liquor as long as you do not charge for the liquor.
- Fire, explosion, and lightning damage - if a fire starts in your office and damages an adjoining office, your general liability policy will cover the damage to the other office.
- Hired auto and non-owned auto - this coverage can be added to your policy and will protect you in the event that there is an accident involving a rented car or a personal vehicle being driven on company business.
- Personal injury - you also have coverage for personal, non-physical injury to another party, including libel, slander, wrongful termination, and privacy violations.
- Advertising injury - in the even that your company is accused of false advertising, libel, misrepresentation, or copyright infringement, your general liability may cover it.
It is important to note that one area that is not covered by commercial general liability insurance is an on-the-job injury to an employee. Those costs are excluded from CGL insurance but will be covered by your workers' compensation plan.
Commercial General Liability Cost
Find the best CGL insurance Pennsylvania policy for your business' unique needs by working with a seasoned agent. Consult with an agent to determine which coverage types you need and any riders or policy addendums that you must purchase to fully protect your business' financial future.
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Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:
Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.
Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties
Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.
Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.
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