Insurance is a crucial part of any business’ plan. If your company were to experience a catastrophic loss, an unexpected accident, or is on the receiving end of a lawsuit, having the right insurance policy can help to protect your brand and cash flow. No matter what kind of business you are considering starting, what you’re selling or where you are trading, commercial general liability (CGL) insurance is a must-have.
If an incident occurs which leads to your company being sued, your insurer will step in to cover the costs and prevent a huge loss of both assets and reputation. We’ve outlined some key facts about business liability insurance and why it’s so important that you have it.
What is CGL?
Simply put, a commercial liability insurance policy will respond in the event of your company being sued by a third-party. This could be an individual, such as a customer or employee, or another business. A lawsuit against your company could be the result of property damage caused by an employee, or a third-party claim for injury in your store, for example. Your general liability insurance policy will also respond if you are sued for slander or libel, in addition to any harm that your company causes to a rental commercial property.
Of course, as a business owner, you’ll want to avoid any of these things happening in the first place. But sometimes you simply cannot control everything and the unexpected will happen. General liability insurance for small business is something that you simply cannot go without.
Bodily Injury and Property Damage:
CGL insurance mainly deals with bodily injury and property damage claims. For example, if your company provides a service to people in their homes, such as plumbing or electrical services, it’s vital to be covered by CGL insurance to ensure that you are protected in the event of an accident that causes damage to the property. CGL insurance will also respond if a third-party is injured as a result of your company or one of its employees.
For example, an employee accidentally dropping a tool and causing injury to a customer could result in a huge lawsuit against your brand, or another scenario could be a customer slipping and injuring themselves due to a wet floor in your retail store.
Personal Injury Liability:
In terms of CGL insurance, personal injury is not to be confused with bodily injury – it focuses on words. Your personal injury coverage will respond when your company or one of its employees is accused of and sued for libel or slander. Typically, this will be an accusation of damaging another person or company’s character, reputation, or position in the community due to slanderous (spoken) or libelous (written) statements. However, bear in mind that in order for your policy to respond and your company to remain covered, you cannot know that any statements were untrue at the time that they were made.
Coverage for Rental Properties:
If your business rents a commercial property such as a store or office space, your CGL insurance policy may also include coverage for tenant’s legal liability. This section of the policy will respond if you are held legally liable for causing any damage to the property. For example, if you or one of your employees were to cause a fire that damaged the property, or if a pipe bursts causing excessive water damage, your CGL property will step in to help cover the cost of repairs and refurbishment, saving your company from a costly expense.
What isn’t Included?
CGL insurance covers most of the general things that you will need to insure as a business owner, making sure that you are protected in the event of a lawsuit against your business for bodily harm, customer property damage, damage to your rental property, or accusations of slander or libel. However, it’s also important to be aware of what is not usually covered by CGL insurance.
Generally, it will not cover product liability claims, where your products cause harm or professional liability claims due to company omissions or errors. You will also not be covered in the event of a claim against your business involving pollution or environmental damage. Lastly, CGL insurance does not cover your employees if they are injured or become unwell at work.
Other Useful Insurance Policies:
Alongside CGL insurance, it’s a wise idea to take out a range of further insurance policies to ensure that your business is covered for every potential eventuality. If you hire employees, employee liability insurance is absolutely essential to ensure that your company is covered if an employee has an accident at work. If you’re selling products to customers, make sure that you are covered with product liability insurance – all it takes is one faulty product to cause injury, leading to a huge and expensive lawsuit.
Don’t leave it to chance – make sure your business is covered, and compliant with the right liability insurance policies.