Commercial General Liability (CGL) Insurance Coverage: An Expert Guide (2024)

Running a business puts you at an elevated risk for lawsuits. Accidents can happen to employees and customers, and it’s your responsibility to insure yourself against the fall-out of these risks.

General liability insurance for businesses acts as a safety net for many types of suits that may be filed against your business.  Even if you decide to carry other types of specialized insurance, a general liability policy is essential. Shop around to find the best insurance companies for you.

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What Does General Liability Cover?

Liability insurance protects your company’s assets and provides financial assistance to pay for injuries or property damage that you may be responsible for.  This includes accidents that happen on your business property as well as those caused by your employees. You might see it referred to as “commercial general liability insurance  Here are some examples of claims that could be covered by a liability policy:

• A customer who sustains injuries after slipping and falling at your business
• An employee who is injured during work
• A customer who’s injured by a product purchased from your company
• You delivery driver causes damage to a building’s loading dock (commercial auto may also apply)

More specialized types of insurance may also apply to each of these claims, but a general liability policy will provide a blanket of protection that can mitigate expenses and protect you from the high costs of lawsuits.

Difference Between Personal and Business Liability Insurance

Some individuals carry personal umbrella policies, which act as a type of personal liability insurance.  These policies are very similar to business liability insurance and they help mitigate costs when it comes to lawsuits.  They differ, however, in their scope and size.  A business policy, often by necessity, may have higher limits and provide greater protections as businesses are usually at greater risk of liabilities.

If your business is a sole proprietorship and you already have a personal umbrella policy, business insurance may not always be necessary.  It’s a good idea to check with your current insurance company to see whether business insurance is right for you.

How Much Does General Liability Insurance Cost?

Remember – liability insurance protects your company’s assets and provides financial assistance to pay for injuries or property damage that you may be responsible for. As a result, investing in this insurance will be essential. The exact price of any insurance policy will depend on the insured’s risk level.  If you run a particularly high-risk business, your policy will cost more than a similar one with fewer risks.

For example, having delivery drivers opens your business to more risk than not offering deliveries.  Balancing the needs of your business with the potential risks is a good way to keep your expenses low and coverage adequate.

You can usually save money on liability insurance by bundling it with other policies.  Many insurance companies will offer lower rates to customers with multiple types of insurance, so you can maximize your protection and keep your policy costs down at the same time.

You can also check with your insurance company to ensure that you are carrying only as much protection as you need and not paying for unnecessary or redundant coverage.  For example, Geico’s general liability insurance will vary in small ways from Progressive’s general liability insurance but the overall package should remain mostly the same.