What is Commercial General Liability (CGL) insurance?
Business owners hear it from everyone – their bankers, their lawyers, Small Business Administration (SBA) counselors, the Chamber of Commerce, and fellow business owners – you have to have general liability insurance. But what is it? Do I really need it? How does it protect me? Can I afford it?
Let’s start with the basics. Commercial General Liability (also just known as liability insurance) is business insurance that protects business owners against claims of liability for bodily injury, property damage, and personal injury. It protects your company’s assets and pays for medical costs and other expenses that arise if someone gets hurt on your property. It also covers property damages or injuries that you or your employees cause.
Business liability insurance can protect you against liability if you or one of your employees cause damage to property you rent. It also covers claims of false or misleading advertising, slander, libel and copyright infringement.
Do I really Need Commercial General Liability Insurance?
The short answer is, yes. Accidents happen, and litigation arising from an accident or incident at your business can be costly to small business owners both in time and money. The Institute for Legal Reform estimates that lawsuits cost small business more than $100 billion per year. And, according to the SBA, costs for defending against a single lawsuit can run from $3,000 to $150,000.
Liability insurance, which covers the cost of your legal defense and any settlement or award you might face, is a relatively small price to pay. Annual premiums run from $750 to $2,000 depending on what kind of business you have and how much coverage you need.
You can buy general liability insurance on its own, but also as part of a business owner’s policy that bundles liability and property insurance into one policy. If you already have a business owner’s policy, check it to see what your liability coverage limit is. You may find that it is quite low, in which case you may need extra coverage through a separate policy.
How much coverage do I need?
The coverage you need depends on the type of business you are in and the perceived risk associated with it. For example, a building contractor will need more coverage than a web designer or consultant. Your business location is also another factor that comes into play. For example, some states tend to award higher monetary damages to plaintiffs claiming personal injury. Some areas have better fire protection than others. Get advice from a licensed insurance broker, who will understand the litigation climate and other factors in your area and can help you select the best level of coverage.
Where can I find a broker who can help me find Commercial General Liability insurance?
Business owners trust Peter Green Insurance Agency to advise them on this and other insurance matters. Our staff can show you a number of Commercial General Liability Insurance policies with different terms and conditions, and help you select one that meets your specific requirements. Visit our website or give us a call today at 888.725.7776 or 714.258.2800.