Did you know that a company can be held liable for anything that goes wrong, even if it's not their fault? No matter how careful you are, there's always the chance that someone could get injured on your property. Besides, you could inadvertently cause damage to another person or their property.
That's where commercial liability insurance comes in. However, many business owners don't know what commercial general liability insurance is or why they need it.
This guide will explain what the policy covers and how it can help your business in the event of a lawsuit.
Commercial general liability insurance, or CGL insurance, is a type of insurance that covers business-related accidents and injuries. The policy can help protect your business from different risks. This includes bodily or personal injuries, customers, employees, maintenance personnel, delivery persons, and any type of visitor.
It can also help protect your business from advertising liabilities, destruction or damage to tangible assets, negligence, omissions, misconduct and breach of duty, and crime.
Who Is Commercial General Liability For?
All businesses should have some form of commercial general liability insurance. Yet, the specific coverage you need will depend on your business. For example, if you own a restaurant, you would have different commercial liability insurance needs than a doctor's office.
Besides protecting your business from incidents that may arise, general liability insurance can also help protect your assets. This is in the event of a lawsuit resulting from a business-related accident or injury.
Defining Liability
Liability is defined as the obligation or responsibility to pay or perform. It's essential to ensure that your business is covered for any liabilities associated with bodily injury or property damage.
Otherwise, your business could be at risk of a significant financial loss if you're found negligent in an accident.
What Does Commercial General Liability Cover?
In most cases, the organization only has to purchase one single-limit policy which satisfies both bodily injury and property damage coverage requirements. Although some suppliers offer separate policies for each clause, check with your supplier if this is something you're interested in. Coverage usually includes:
Bodily or Personal Injuries
Bodily injury or personal injury insurance covers a variety of injuries that could be caused by negligence on behalf of the insured. This can include lacerations, contusions, broken bones, or limb loss. It also covers other types of injuries that may occur at your place of business.
Customers
Customer injury insurance protects customers from any injuries that may occur while on your property. This includes slip and fall accidents occurring while they're on your business premises.
Employees
Employee injury insurance covers employees for any injuries while on the job. This includes accidents that may occur while at work and injuries that may develop over time due to repetitive tasks.
Maintenance Personnel
This insurance coverage protects those responsible for the upkeep of your property. Maintenance personnel can include anyone from janitors to gardeners.
Delivery Persons
Delivery persons are also covered under commercial general liability insurance. They're protected against injuries that might occur while making a delivery to your business.
Any Type of Visitor
Visitors who come onto your property are protected under this insurance type. This includes contractors or construction workers that you might have on your premises.
Advertising Liabilities
Advertising liability insurance protects your business against lawsuits due to injury, loss of income or damage to personal property. Did you know some people might your advertisement offensive and start a claim? Let your commercial liability cater for such claims if they happen.
Destruction or Damage to Tangible Assets
Destruction or damage to tangible assets refers to accidents that cause damage to tangible assets. Restoring equipment or buildings after an accident is expensive. Luckily, a commercial liability cover can help you handle the stress promptly without worrying about the costs.
Negligence, Omissions, Misconduct and Breach of Duty
Has a client or consumer filed a negligence lawsuit against your business? If your business is found liable for any above incidents, this policy will help pay for the damages.
Crime
Crime coverage protects an insured person from vandalism, intentional acts performed by others and theft or robbery. This form of insurance helps cover the costs associated with these types of incidents.
What Is Not Covered?
As with any type of insurance policy, specific exclusions apply. Commercial general liability insurance will not cover:
Intentional damage or destruction
Slander or defamation of character
Hired or non owned automobile liability
Workers compensation
Product liability Insurance
It’s standard procedure for each insurance provider to investigate the cause of the accident or damage in a business. If the above reasons are found among the primary reasons why your business incurred losses, you may not get compensated.
Therefore, educating your workers and observing the best practice in your operations is vital.
What to Look for in a Good Commercial Liability Insurance Company
When it comes to finding an excellent commercial liability insurance company, there are a few key things you need to look for. First, you want to ensure the company has an excellent reputation and reliability.
You need a firm that offers a wide range of commercial general liability insurance options for your business. Everyone wants an affordable insurance company that can accommodate your budget.
Here are ten things that you should look for in a great commercial liability insurance company:
What Does It Cover?
Any insurer worth their salt will cover property damage and bodily injury. Commercial property is often more pricey than private homes, and it makes sense if you also want to protect them under your policy. This includes all vehicles in use in your business.
Deluxe Protection: Your insurer should cover injuries that occur on the job for you and your employees, regardless of fault. It's an important consideration since most businesses require their workers to drive related vehicles. There may also be a coverage option for damage or loss due to breakage or theft.
What Are the Coverage Limits?
Premium rates vary by company, and it's best to get quotes from more than one agency before making any decisions. Your policy should have adequate limits. If anything happens, you shouldn't have a lot of financial responsibility on your hands.
Look into the minimum requirements for both liability and medical payments insurance. For example, some carriers may provide up to $100,000 in liability coverage.
How Much Will Commercial General Liability Insurance Cost?
It is hard to determine which insurance company offers the best deal, but simple research will help you compare prices. Remember, you are not just buying a policy but rather an investment.
Choose the right agency that's willing to take the time to explain all your options even if they offer an initial quote that seems too good to be true.
Is There a Deductible?
Every good policy has a deductible clause, yet it's important to note how much it can affect your wallet. The deductible should fall well below what you would have paid out-of-pocket for any claims.
It can be a standard per-incident fee, or you may have to pay it only when the total amount is above a specific threshold. Most carriers will also offer options that don't require your deductible to increase when filing multiple claims.
What Does the Policy Cover?
Make sure all the assets and employees of your business are protected if something goes wrong. Check if vehicles used in running your business are included, cargo, equipment and inventory.
Keep in mind that this insurance pays out depending on what caused an incident, including faulty equipment or negligence on behalf of one of your workers. This way, the blame game doesn't come into play if you need to file a claim.
How Much Time Will It Take to Get the Claim Process Started?
Agents and carriers should start the claims process as soon as possible after an accident has occurred. Sometimes, they may even have a mobile app that lets you report an accident and get started on the paperwork right away.
Make sure you have the contact information of your agent or insurance company readily available in case of an emergency.
What's the Company's Reputation?
It's a good idea to dig into the company you're thinking of doing business with. Ask friends and family if they've ever had to make a claim and how it was handled.
Do a quick online search to see if any red flags have been raised. A good company should have an easy-to-use website, helpful customer service, and be upfront about its coverages and policies.
How Long Has the Company Been in Business?
The longer the company has been in business, the more experience they've had with claims and policyholders. This doesn't mean that a newer company is automatically untrustworthy, but it can be a good indicator of how they'll handle things if something goes wrong.
Ask your agent how long they've been working with the insurance company you're considering.
Is There 24/7 Customer Service?
A company that cares about its clients will keep an emergency hotline ready in case of urgent matters. Make sure the company you choose has a toll-free number, email address and live chat feature.
If you're not comfortable with the response time, go with another company.
What Are the Reviews?
Reading reviews can be a helpful way to get a sense of what other customers think about their experience with a particular company.
Is the customer service friendly? Was the claim process easy to navigate? Are there any hidden fees or clauses that you should know?
Keep in mind that everyone's experience is different. Yet, it can give you a good starting point on your search for the right policy.
Typical Costs of Commercial Liability Insurance
Commercial general liability insurance coverage begins around $2,500 per year for a policy with a broad limit. This depends on the type of business and the risks associated with it. Remember, your commercial general liability insurance policy could cost you anywhere from $1,000 to over $10,000 per year.
Before choosing an insurer, check what is covered in the policy and exclusions since different business classifications will affect your premium. Professional suppliers in your area can offer guidance based on their own experience. They're familiar with potential hazards that may be present at your location.
Other things that come into play when pricing a policy include the deductible you are willing to pay in the event of a claim. Also, it depends on whether you want limits on defence costs.
Here are some general guidelines for what you might expect with most companies:
INJURY
TYPICAL COSTS
Bodily Injuries
$25,000 to 50,000
Customer Injuries
$1 million per claim or $2 million annual aggregate
Maintenance Personnelle Injuries
$100,000 for injuries per person or $300,000 annual aggregate
Delivery Persons Injuries
$500,000 per incident or $1 million annual aggregate
Injuries to Any Type of Visitor
$100,000 per claim or $300,000 annual aggregate
Advertising Injuries
$500,000 for all claims per incident or $1 million annual aggregate
Defamation
$100,000 per claim or $300,000 annual aggregate
Customer Injury
$1.00 to $2.00 per $100 of payroll
Employee Injury
$1.25 to $3.75 per $100 of payroll
Maintenance or Delivery Worker Injury
$0.75 to 1$ per $100 of payroll
Any Type of Visitor Injury
$0.50 to $1.00 per $100 of payroll
Crime or Larceny Losses
Varies greatly depending on the type, location and industry. Yet, in most cases, it runs around 2% to 5% of an insured's annual income, with a minimum deductible ranging from around 1% to 5%
Get a Quote for the Best Commercial Liability Insurance
Have you started a small business or have been there but never thought of insuring it? If so, it's time you protected your investment against different lawsuits associated with business liability.
Here at Insurdinary, we have partnered with the best and most affordable folks in the Commercial Liability Insurance market. APOLLO Insurance is all hands on deck when it comes to securing your business with the most comprehensive coverage. Reach out to them today. An experienced and knowledgeable agent is waiting to answer your questions.
