What is general liability insurance?
A Commercial General Liability (CGL) policy protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts. Most businesses require some form of general liability insurance to protect company assets and sign important contracts.
What is covered?
This policy covers responsibility associated to the property of a business, operations and products of which damage was caused by design, and the installation or malfunctions. This insurance also responds in cases of legal claims for damages to third parties including expenses for attorneys’ fees, court costs or any loss of profits. Examples:
- Property damage lawsuits: For example, say you rent the building of a restaurant and the kitchen goes on fire and destroys half the restaurant. The landlord then sues you for $200,000 worth of damages. A general liability policy will help cover the costs associated to the damages.
- A slip and fall incident: For example, say a customer slips and falls in your store after you mopped the floor and breaks a leg. The customer then sues you for $120,000 of their medical costs. A general liability policy will help cover costs associated with this bodily injury.
- A product liability incident: For example, say you own a hair salon and sell hair products. A customer purchases one of your shampoos and in result suffers an allergic reaction and has to miss a week of work. The customer then blames the shampoo for the illness and sues you for lost wages. A general liability policy can typically cover the legal expenses associated with product liability
- An advertising lawsuit: For example, say you and your team created a new advertisement campaign on your website. Once it’s launched to the public, a few days later a company sues you $215,000 for copyright infringement. A general liability insurance will help cover any of these costs.
Although general liability isn’t always required, it is highly recommended to purchase in order to avoid any unexpected incidents. It’s better to have a peace of mind that your business is protected than to not be properly insured and have unexpected expenses and be in a financial burden from future lawsuits.