Commercial General Liability Insurance: Cover, Cost & Best Practice

Commercial General Liability Insurance
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CGL insurance, or commercial general liability insurance, shields businesses from lawsuits filed by victims of accidents they are alleged to have caused. General liability insurance or commercial liability insurance are other names for this protection. In this article, we will tell you what commercial general liability insurance is, its coverage, price, commercial general liability insurance in New York, California, and commercial general liability insurance for small businesses.

Commercial General Liability Insurance

Businesses can protect themselves against financial loss resulting from lawsuits filed by victims of accidents or injuries on their premises or caused by the company’s operations or goods with commercial general liability (CGL) insurance.

Although it does not protect against every possible loss, a business should have commercial general liability insurance.

Commercial General Liability Insurance Coverage 

A CGL insurance policy will often cover the costs of your legal defense as well as all damages if you are held liable—up to the policy limits. CGL coverage is one of the most important insurance products because of the devastating effects a lawsuit may have on a business and the prevalence with which such liability claims occur. Standard commercial general liability insurance coverage includes:

#1. Coverage A: Bodily Injury and Property Damage Liability

Coverage for bodily injury and property damage protects against losses caused by an insured person being legally responsible for another person’s harm or damage to their property that happened because of careless actions they took outside of work or because of their business operations or premises. Mental injuries and emotional distress can be just as real as physical wounds, even when there are no visible signs of physical damage.

Workers’ compensation and employment practices liability insurance are not included but can be acquired separately. Furthermore, pollution liability is omitted and might be added as an endorsement.  However, the scope of this coverage is limited, so high-risk businesses should look into purchasing additional environmental liability insurance. 

 Other risks, such as liquor liability, professional liability, and others, may also be excluded. If you need help figuring out whether endorsements apply to your company, go to your insurance agent.

#2. Coverage B: Personal and Advertising Injuries

Personal injury and advertising injury liability shield an insured person from being responsible for certain crimes, such as

  • Libel
  • Slander
  • False arrest
  • Infringing on another’s copyright
  • Malicious prosecution
  • Use of another’s advertising idea
  • Wrongful eviction, entry, or invasion of privacy

#3. Coverage C: Medical Payments

Limited medical payment coverage includes compensation for injuries experienced by a non-employee as a result of an accident on the insured’s premises or while exposed to the insured’s business operations.  There is no legal process necessary to initiate medical payment coverage. Small medical disputes might be settled quickly and amicably in this way. It is included in the CGL insurance and covers all required and reasonable medical, surgical, ambulance, hospital, professional nursing, and burial expenditures for a person wounded or killed in an accident on the insured’s property or originating from business operations. Because Commercial General Liability Insurance coverage is offered on a no-fault basis, there is no defense or legal liability coverage, as there is for bodily injury and property damage (Coverage A) and personal and advertising responsibility (Coverage B).

Read Also: PROPERTY INSURANCE: What It Covers

Commercial General Liability Insurance for Small Business

As an entrepreneur, you understand the importance of small businesses to our economy and the inherent dangers of starting a new venture. Numerous possible liabilities, ranging from client accidents to property damage, might jeopardize your company’s profitability. As a small business owner, you’re constantly looking for ways to reduce risk and protect your company, right? Further,  we will discuss commercial general liability insurance and how it might help your small business.

Importance of Commercial General Liability Insurance for Small Business.

In India, CGL insurance is not a mandatory requirement. However, businesses are strongly advised to safeguard themselves against potential legal liability deriving from their operations. Commercial general liability insurance is applicable to businesses of all sizes and types, including startups and small business. This protection is offered to business proprietors, managing directors, operations directors, and anyone involved in business operations. Additionally, it protects sellers, distributors, and manufacturers from commercial liability.

Due to India’s extremely volatile and unpredictable liability environment, it is common for clients and small business partners to demand that you have commercial general liability insurance before they will work with your company. Before filing a commercial lease, a landlord may request proof of insurance, for instance. Some clients might also require that they be listed as additional insureds on your CGL policy. This means that the client is protected against any liabilities arising from the operations of your business. In this manner, clients can reduce their risk exposure and safeguard against potential financial losses.

Consequently, small businesses must implement a commercial general liability insurance policy and maintain outstanding business relationships with their stakeholders. CGL insurance may reassure clients that the business has taken precautions to protect itself from unanticipated liabilities. As a result, your company’s reputation is enhanced and you gain a competitive advantage.

Read Also: PERSONAL PROPERTY INSURANCE: Coverage, Types & Cost

Commercial General Liability Insurance Price

The first insurance coverage that a small business should consider purchasing is commercial general liability insurance. It protects you from the legal costs of typical accidents, and basic coverage prices are roughly $42 per month.

What Does General Liability Insurance Cost for Small Businesses?

General liability insurance typically costs $42 per month, or roughly $500 per year. Most policyholders should anticipate paying a monthly premium of $30–$60 for general liability insurance coverage.

Policy Limits Determine the Price of Commercial General Liability Insurance

The limits of coverage are what determine the cost of commercial general liability insurance. Most small business owners choose a general liability policy with a per-occurrence limit of $1 million and an aggregate maximum of $2 million.

General liability insurance covers the majority of third-party risks. Companies with a physical storefront or frequent client interaction may consider increasing their policy limits because they are more vulnerable to bodily injury, property damage, and advertising injury lawsuits. Higher limits are more expensive, but they cover more costly claims.

Other Factors That Affect Commercial General Liability Insurance Prices

The more you interact with the public, the more you will have to pay for this policy. Your insurance company will consider the following factors when calculating your premium:

#1. Business Location and Operations

Your company’s operations and location might have a significant impact on the premium you pay. For example, businesses located in locations with greater crime rates or higher foot traffic may have to pay higher premiums than those located in areas with lower levels of these elements.

A busy IT staffing agency, for example, with people continually coming and departing, will pay more for this coverage than a web designer’s office with only a few clients per month.

While general liability insurance is suggested for many small businesses, most state laws require small business owners to purchase workers’ compensation and commercial auto insurance if they have business-owned vehicles.

#2. Your Industry

Another aspect influencing the price of your commercial general liability insurance is your industry. In general, high-risk sectors will have to pay higher premiums than low-risk industries.

Businesses in industries with a history of filing claims, such as computer repair or other work involving other people’s property, will generally pay extra for business liability insurance.

#3. Your Deductible

Policies with high deductibles are less expensive, but you must pay that amount before you file a claim. Most TechInsurance clients select a $500 deductible for general liability insurance.

#4. Your Claims History

Insurance companies consider your claim history when determining how risky you are to insure. Companies with a history of commercial general liability lawsuits will have to pay more for insurance than those with a clean record.

#5. Number of Employees

It’s simple: the more employees you have, the more likely an accident will occur or a client will bring a lawsuit. Even if you work as a freelancer, independent contractor, or sole proprietor, you need to get general liability insurance to protect yourself from the high costs of legal defense and/or medical bills.

Commercial General Liability Insurance New York 

Commercial general liability insurance in New York safeguards your small business in the event that someone sues you for physical harm, advertising harm, or property damage. And you almost certainly need it if you own a small business in New York. Why? Let’s start with a word that every small business owner dreads: litigation. Liability lawsuits are more common than you may think four out of every ten small firms will face a legal struggle in the next ten years and when they do occur, they can be extremely costly to fight. When you are sued, you may have to spend thousands of dollars on legal counsel as well as the expense of a settlement. 

Consider the following scenario: a new client visits your business and, as they go in the door, trips on a cord and falls. When they get up, you can tell that their head has been wounded and that they require medical attention. You offer to assist and apologize repeatedly, but they leave immediately and mention calling their doctor. For a few weeks, you don’t hear anything about the incident until you receive an official-looking letter in the mail. It comes from a lawyer. The wounded client is suing your company for $200,000 in damages for bodily and mental harm.

How Much Is Commercial General Liability Insurance in New York?

There is no way to accurately predict how much you will pay for general liability insurance; the price depends on a number of factors, including your company’s location and industry. General liability insurance premiums for Huckleberry clients have been as low as $33 per month.

Commercial General Liability Insurance California

Small business owners in California, from Los Angeles to San Francisco to Sacramento, are likely to require general liability insurance. The state no longer requires broad liability. Nonetheless, it covers your firm in the event that someone sues you for bodily harm, property damage, reputational harm, or advertising harm, and it’s one of those policies that almost every business owner should have.

Why? One major reason is that many large clients will want confirmation of general liability insurance coverage before hiring you (they don’t want you to go out of business as a result of a lawsuit!). Furthermore, 40% of small businesses may face a liability lawsuit in the next decade and the majority will lack the resources, time, and lawyers to fight the claim on their own. Without general liability insurance, your company could incur legal defense costs in the tens of thousands of dollars.

What Is an Example of a Commercial General Liability Claim?

After you’ve swept the floor, one of your photography business customers slips and falls. They break their ankle and require two surgeries to recover. They sued your company for medical expenses. Your general liability insurance may be able to cover this physical harm claim.

What Is the Purpose of Commercial General Liability?

General liability insurance is a policy that protects your company’s assets by covering legal expenses, damages, or settlements for covered claims up to the policy amount. Accidents might happen even if you run your firm carefully. For example, suppose a customer slips and falls on a wet floor.

What Is the Difference Between Commercial General Liability and Umbrella Insurance?

Excess liability insurance adds limits to an underlying policy, whereas umbrella liability insurance broadens coverage to include claims and losses that are not initially covered.

What Are Exclusions in Commercial General Liability?

Exclusions in a CGL policy, often known as CGL exclusions, are situations or dangers that the insurance company will not cover. Exclusions are common in all types of insurance, not just business general liability coverage. CGL is well-known for providing extensive coverage against third-party lawsuits.

What Does an Umbrella Policy Not Cover?

Personal possessions are damaged. Intentional or criminal behavior. In some cases, such as when employing uncovered recreational vehicles or exposed dog breeds, property damage or injury may occur. Others’ injuries or property damage for which your company is accountable


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