Every business, regardless of size or industry, faces risk- which is why most companies work with a Risk Advisor to secure proper insurance coverage. The only way to effectively protect the assets of your company is to carry adequate commercial general liability insurance coverage (CGL).
General liability insurance protects your company from damages caused by bodily injury or property damage for which your company is found to be legally liable.
WHAT DOES GENERAL LIABILITY INSURANCE COVER?
A typical commercial general liability insurance policy provides coverage for claims of bodily injury or other physical injury, personal injury (libel or slander), advertising injury and property damage as a result of your products, premises or operations.
This coverage can be offered as a package policy with other coverages such as property, crime, automobile and more.
As a safeguard against liability, general liability insurance enables you to continue your normal operations while dealing with real or fraudulent claims of negligence or wrongdoing. General liability insurance also provides coverage for the cost to defend and settle claims.
Here’s more detail into what a typical general liability insurance policy may cover:
Automatic additional insured: Coverage is provided for written contracts, agreements and permits.
Personal and advertising injury: Protects against offenses made by you or your staff during the course of business, such as libel, slander, disparagement, or copyright infringement in advertisements.
Defense costs: Provides coverage for legal expenses for liability claims brought against your company regardless of who is at fault.
Medical expenses: Provides coverage for medical expenses if someone is injured on your premise or by your products.
Premises and operations liability: Provides coverage for bodily injury and property damage sustained by others on your premises or in conjunction with your business operations.
Products liability: Provides coverage for bodily injury and property damage sustained by others as a result of your products.
HOW MUCH GENERAL LIABILITY INSURANCE COVERAGE DOES MY BUSINESS NEED?
The amount of coverage your business needs depends on three factors: perceived risk, where you operate your business and the type of products you manufacture.
Perceived risk: Consider the amount of risk associated with your business operations and functions. For instance, if you manufacture heavy machinery you will generally need more coverage as compared to another organization that manufactures stuffed animals.
Premises and operations liability: If you operate in a state that has a reputation for rewarding high damages, then you may wish to purchase higher limits of liability.
Type of product manufactured: If you manufacture a dangerous product, you may want to carry higher limits of liability.
Remember, you can purchase an Umbrella Liability policy to help achieve the desired limits of liability, if you feel you need an extra layer of protection. Also, it's important to note that a General Liability insurance policy can be part of a package policy, where other tailored coverages can be added to support your overall business insurance program. It's best to consult with your insurance broker or Risk Advisor on this.
If you own or operate a business, and are looking for advice and insight on risk management and insurance strategies for your company, we’re here to help! Whether it’s reviewing your risk management and insurance program, or simply providing education and resources to help you understand a specific line of coverage, our Risk Advisors are here to serve YOU.
My name is Pat O’Neill and I’m a Risk Advisor at The O’Neill Group, a risk management and insurance firm in Wadsworth, Ohio. Our firm serves companies locally, regionally and nationally. Call me at (330) 331-7960 or email me at firstname.lastname@example.org.
This article was adapted from Zywave’s Coverage Insights: General Liability. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.