Why Your Business Needs Commercial General Liability Insurance
All companies should have insurance included as part of their business plan. Insurance saves companies money if they go through a cataclysmic loss and it helps protect your assets should an unexpected accident occur. Your business should have CGL (commercial general liability) insurance to assist you whenever an incident arises that might cause your company to be sued.
What Is Commercial General Liability Insurance?
CGL insurance gives your company protection if it is sued by another business or individual. Most suits result in property damage caused by one of your staff members or bodily harm to a third party or an employee. If you’re sued for slander, libel, or harm to a property you rented, CGL can help you here as well. When your company defends against a lawsuit, CGL provides you with protection by paying all of your legal fees including a court reward or settlement. A majority of commercial general liability insurance policies offer protection against 4 specific claims.
Property Damage and Bodily Injury Liability
The first claim we will discuss is property damage and bodily injury liability. This is a cornerstone of commercial general liability insurance because it responds whenever an employee damages property belonging to a third party like when a plumber causes accidental water damage to a customer’s house. If a third party becomes injured by your employees or your company, CGL insurance will respond to that as well. Common bodily injuries include such incidents as a customer slipping on the floor of a store and injuring himself or a construction worker accidentally dropping a tool onto a pedestrian.
Personal injury liability is different from bodily injury in that it focuses on words instead of physical harm. If you, your company, or your employees are sued for slander or libel, personal injury coverage will be there to assist you. Typical personal injury suits can include accusations that your company damaged a company or person’s position, reputation, or character in the community due to spoken (slanderous) or libelous (written) defamatory statements. You must not know that the statements were untrue when they were mentioned, otherwise, your liability policy may not respond.
Sometimes the best way to prevent your company from being sued is to become proactive whenever an accident occurs. If someone on your property is injured due to the acts of a worker, medical payment coverage will pay for their medical bills voluntarily without them needing to file a suit. To avoid a lawsuit while maintaining the reputation of your company within your community, it’s always best to take action by paying an injured person’s medical bills.
Legal Liability of the Tenant
If you rent a shop, warehouse, retail outlet, or office from another company, legal liability coverage will respond should you become legally liable for damaging the property. If you or one of your employees causes a fire that produces damage to the property, this coverage would help you reimburse your landlord. Likewise, if a pipe bursts and causes water damage, your commercial general liability policy will respond.
What Isn’t Included
Many CGL policies are broad however numerous liabilities aren’t covered by a majority of insurance policies. These include claims involving pollution caused by your employees or your business or claims that involve environmental damage. It excludes liability claims against products that cause harm and claims due to your company’s omissions or errors, which are otherwise known as professional liability claims. Most insurance products are meant to respond to all exclusions along with any foreseeable accident, but you must purchase these policies separately from your commercial general liability policy.