What Is Commercial General Liability Insurance? And Why It’s Important

What Is Commercial General Liability Insurance? Commercial general liability insurance, also known as CGL, is a business insurance policy that covers services of the injured and compensates for most negligence that occurs according to law or contract.

It typically provides liability coverage for a loss or a bodily injury that occurs while the policy is in place for a set period. The liability insurance can be written to cover the business for a set period or only when a claim is made.

What Is Commercial General Liability Insurance?

Commercial General Liability Insurance is designed to insurance business policyholders against lawsuits and other financial claims that people or employees can make against it. This, of course, is very important for businesses that need to protect themselves from lawsuits. If the business that has a commercial general liability insurance policy is sued, they will be covered by the business insurance policy, assuming it was during the coverage period. This helps a business avoid financial disaster.

Some many characteristics and factors must be considered before purchasing commercial general liability insurance policies for your business. Here are a few things to consider before making a purchase.

Six Characteristics of Commercial General Liability Insurance to Consider

Deductible

As with all insurance policies, your deductible amount plays a direct role in the number of premiums that you pay for your insurance policy. The same is true for these policies for businesses.

Sunset Clause

Commercial general liability insurance has a provision called the sunset clause, limiting the number of years a claim can be reported against a business insurance policy.

Medical Payments

A policy covers medical payments when the company’s negligence causes an injury. These medical payments are typically provided to the injured party through a third party, and they can supplement any Workers Compensation insurance that a person may receive as well.

Aggregate Limit

The aggregate limit is the maximum amount of money that an insurance policy will pay for a claim during the policy period. The aggregate limitation of commercial general liability insurance applies to any damages that must be paid for personal injury, damage to property, injuries from advertising injury, and medical expenses.

Per Occurrence Limit

Just like your car insurance coverage, these policies have a maximum amount of money that the business insurance company will pay towards a single claim against your liability insurance policy. You will have to consider this when you purchase your liability insurance because these amounts help determine your premiums.

Advertising and Personal Injury Limits

Your business insurance policy will pay a maximum amount of money for a claim from your business’ advertising. The same is true for claims resulting from personal injury, which include damages from libel, slander, false arrest, and other things that non-business policies, homeowners insurance, car insurance policy owners, and the like are not used to having to insure themselves against.

Every business needs an insurance policy that provides coverage to them for their products and services that have the potential of injuring someone or one of their workers. Like all insurance policies, general liability insurance protects businesses from lawsuits generated from injury and neglect that may occur while making products or providing a service.