Commercial General Liability (CGL) Insurance Coverage: An Expert Guide (2024)
General liability insurance for businesses protects company assets and provides financial assistance for injuries or property damage. General liability insurance rates vary by the insured's risk level, but the best way to save is to shop around for multiple general liability insurance quotes. General liability insurance companies include many major providers.
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Laura D. Adams
Insurance & Finance Analyst
Laura Adams is one of the nation’s leading finance, insurance, and small business authorities. As an award-winning author, spokesperson, and host of the top-rated Money Girl podcast since 2008, millions of readers and listeners benefit from her practical advice. Her mission is to empower consumers to live healthy and rich lives by planning for the future and making smart money decisions. She rec...
Insurance & Finance Analyst
UPDATED: Nov 27, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
UPDATED: Nov 27, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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Running a business puts you at an elevated risk for lawsuits. Accidents can happen to employees and customers, and it’s your responsibility to insure yourself against the fall-out of these risks.
General liability insurance for businesses acts as a safety net for many types of suits that may be filed against your business. Even if you decide to carry other types of specialized insurance, a general liability policy is essential. Shop around to find the best insurance companies for you.
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What Does General Liability Cover?
Liability insurance protects your company’s assets and provides financial assistance to pay for injuries or property damage that you may be responsible for. This includes accidents that happen on your business property as well as those caused by your employees. You might see it referred to as “commercial general liability insurance Here are some examples of claims that could be covered by a liability policy:
- A customer who sustains injuries after slipping and falling at your business
- An employee who is injured during work
- A customer who’s injured by a product purchased from your company
- You delivery driver causes damage to a building’s loading dock (commercial auto may also apply)
More specialized types of insurance may also apply to each of these claims, but a general liability policy will provide a blanket of protection that can mitigate expenses and protect you from the high costs of lawsuits.
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Difference Between Personal and Business Liability Insurance
Some individuals carry personal umbrella policies, which act as a type of personal liability insurance. These policies are very similar to business liability insurance and they help mitigate costs when it comes to lawsuits. They differ, however, in their scope and size. A business policy, often by necessity, may have higher limits and provide greater protections as businesses are usually at greater risk of liabilities.
If your business is a sole proprietorship and you already have a personal umbrella policy, business insurance may not always be necessary. It’s a good idea to check with your current insurance company to see whether business insurance is right for you.
How Much Does General Liability Insurance Cost?
Remember – liability insurance protects your company’s assets and provides financial assistance to pay for injuries or property damage that you may be responsible for. As a result, investing in this insurance will be essential. The exact price of any insurance policy will depend on the insured’s risk level. If you run a particularly high-risk business, your policy will cost more than a similar one with fewer risks.
For example, having delivery drivers opens your business to more risk than not offering deliveries. Balancing the needs of your business with the potential risks is a good way to keep your expenses low and coverage adequate.
You can usually save money on liability insurance by bundling it with other policies. Many insurance companies will offer lower rates to customers with multiple types of insurance, so you can maximize your protection and keep your policy costs down at the same time.
You can also check with your insurance company to ensure that you are carrying only as much protection as you need and not paying for unnecessary or redundant coverage. For example, Geico’s general liability insurance will vary in small ways from Progressive’s general liability insurance but the overall package should remain mostly the same.
Case Studies: Illustrating the Importance of General Liability Insurance for Businesses
Case Study 1: Slip and Fall Accident at John’s Restaurant
John owns a popular restaurant in town. One evening, a customer named Sarah slips on a recently mopped floor and sustains injuries. Sarah decides to file a lawsuit against John’s restaurant, claiming negligence in maintaining a safe environment. Fortunately, John had general liability insurance, which covers the medical expenses and legal fees associated with the incident, helping him protect his business assets.
Case Study 2: Property Damage Caused by Mark’s Construction Company
Mark owns a construction company specializing in home renovations. While working on a project, one of Mark’s employees accidentally damages a neighboring property. The property owner, John, demands compensation for the repair costs. Mark’s general liability insurance comes to the rescue, covering the property damage and avoiding a costly lawsuit.
Case Study 3: Product Liability Claim against Sarah’s Manufacturing Company
Sarah’s manufacturing company produces electronic devices, but one device malfunctions and harms a customer named Mark. Mark files a product liability claim for damages. Luckily, Sarah’s general liability insurance covers legal defense and potential settlement, safeguarding her business financially.
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Frequently Asked Questions
What does general liability insurance cover?
General liability insurance protects your company’s assets and provides financial assistance to pay for injuries or property damage that you may be responsible for. It covers accidents that happen on your business property as well as those caused by your employees.
What are some examples of claims that could be covered by a liability policy?
Some examples of claims that could be covered by a liability policy include slip and fall accidents, property damage caused by your business operations, product liability claims, and advertising injuries such as copyright infringement or defamation
What is the difference between personal and business liability insurance?
Personal liability insurance focuses on individuals, providing coverage for personal liability incidents outside of business activities, such as accidents at home or involving personal vehicles. This covers incidents on the insured person’s property or involving personal activities. Personal liability insurance is generally lower and tailored to personal risks.
Business liability insurance, safeguarding them against liability risks associated with their operations, products, or services. It covers bodily injury, property damage, personal injury, and advertising injury claims arising from business activities. This encompasses a broader range of scenarios related to business operations. CGL insurance typically offers higher limits to account for potential commercial liabilities.
Do I need general liability insurance for my business if I already have a personal umbrella policy?
If your business is a sole proprietorship and you already have a personal umbrella policy, you may not always need separate business liability insurance. However, it’s recommended to check with your insurance company to determine if your current coverage adequately protects your business.
How much does general liability insurance cost?
The cost of general liability insurance varies depending on the risk level of your business. Higher-risk businesses generally have higher premiums. Additionally, factors such as your location, industry, business size, and coverage limits can influence the cost. Bundling general liability insurance with other policies and comparing quotes from multiple insurance companies can help you find the best rates.
Are you looking for free insurance quotes?
Your one-stop online insurance guide. Get free quotes now!
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Laura D. Adams
Insurance & Finance Analyst
Laura Adams is one of the nation’s leading finance, insurance, and small business authorities. As an award-winning author, spokesperson, and host of the top-rated Money Girl podcast since 2008, millions of readers and listeners benefit from her practical advice. Her mission is to empower consumers to live healthy and rich lives by planning for the future and making smart money decisions. She rec...
Insurance & Finance Analyst
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.