FRIDAY, DECEMBER 11, 2020
Your business’s commercial insurance portfolio must contain coverage for your property assets. However, it must also protect you against the liabilities present in your business setting and through your operations. If problems were to harm others, then it might be your responsibility to compensate those affected. Commercial general liability (CGL) insurance is the coverage that helps you do so.
When you buy a CGL policy, you are demonstrating that your business is a responsible and responsive company. With this coverage, you’ll be able to respond to a third party’s claims that you caused them harm. If a legal battle ensues then you will have assistance from your policy in both making the appropriate settlement and covering your own legal fees.
A general liability policy is the foundation of your business’s liability insurance portfolio. While your total liability coverage might consist of several policies in the end, the CGL plan remains the primary coverage provider. It protects you against liability claims arising from accidents that are common in most businesses.
Though CGL plans are customizable to you, they still usually offer five standardized types of benefits. These are:
Bodily Injury Liability Insurance
Bodily injury liabilities are hazards present in any business setting. Someone might fall on a wet floor, get hit in the head by an item falling onto them from a high shelf, or get hurt on a piece of your machinery. In these cases, they might sustain a severe injury, a long-term disability, or even be killed. They or their family might then face high medical bills and even lost income. Because the injury occurred in your business, the injured party might sue you for their medical bills and other damages. Bodily injury liability coverage will help you compensate them.
Property Damage Liability Insurance
When you provide services to clients, you might accidentally damage their property. For example, a plumber might visit someone’s home to install a new water heater. However, during the work, they might make a mistake that causes a pipe elsewhere in the house to burst and flood the home. As a result, the serviceman’s mistakes have wound up causing water damage to the home. In these situations, your liability insurance can help you cover that person’s property damage.
Completed Operations Liability Insurance
Completed operations liabilities are property damage or injury risks that exist after you complete your work. In the case of the plumber above, a burst pipe might actually occur after the plumber has completed his work and left your home. While he thought that he did his work appropriately, he might have failed to catch a small problem that led to a bigger issue later. In these cases, your CGL plan will likely make allowances for these losses. However, some will limit the time frame of when they will provide coverage. If someone makes a claim after this period ends, then coverage will not apply.
Product Liability Coverage
A business’s products can cause harm to others. For example, a manufacturer of children's toys might fail to catch a choking risk on one of the items, and then get sued by a parent who claimed that it harmed their item. Or, perhaps someone decides to sue your restaurant because they got sick after eating one of your dishes. Because items that you made caused harm to someone else, product liability coverage can step in to help you cover the results.
Personal Injury/Advertising Injury Coverage
Your negligence doesn’t just have to cover physical injuries or property damage. Sometimes, the losses that someone claims might be less solid. For example, someone might claim that they suffered reputational harm because of something your business did or said. These might include allegations of:
Libel or slander
And other losses
While someone might not have a physical loss to point to, they might still be able to make a claim that you caused them harm. Regardless of whether they can make this claim hold up in court, the resulting legal expenses and potential settlement can still prove devastating. Personal injury insurance is designed to protect you in case of these situations.
Some general liability policies also include accidental medical payments coverage. These benefits will cover you
Expanding your CGL Policy
Your general liability insurance is not designed to encompass every liability present in your business right from the start. Therefore, you must expand on your liability benefits even after you have your general plan. Some of the extra coverage you might need includes:
Errors & omissions insurance
Directors & officers insurance
Employment practices liability insurance
Additionally, if you want to buy more coverage for your general liability risks than your standard CGL policy will provide, then you can also invest in commercial umbrella insurance. This policy will step in to pay for liability costs after your CGL benefits have paid up to their maximum limits. As a result, you will have more coverage at times when you might find these benefits essential.
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