Great Reasons Your Business Needs A CGL Insurance Policy

For contractors, entrepreneurs, and small business owners, commercial general liability (CGL) insurance is one of the basic, must-have insurance policies. In a nutshell, CGL insurance protects your business against legal ramifications resulting from errors, injuries, or damages that you or your employees cause to a third-party. However, the insurance does more than that.   

But first, how easily can your business become the victim of legal liabilities?

In this blog

When Does Your Business Face Legal Liabilities?

Even when you’re doing everything right, things may go haywire, leading to unexpected legal obligations. A few examples of such events are:
  • While visiting your office, your client slips and is wounded.
  • A class action lawsuit is filed against your business due to misleading information it disseminated among the public.
  • Your company publishes content that infringes on another company’s copyright.
In the above examples, your company would be held liable for medical bills, compensatory damages, and punitive damages respectively. All it takes is a minute accident or error, and your business may have to spend anywhere from thousands to millions of dollars to fix the situation. As per The Washington Post, Walmart faced a class action lawsuit in April 2020, in which a federal judge approved a settlement of $14 million for their discrimination against pregnant employees by denying them necessary workplace accommodations.
good cgl insurance

7 Reasons You Need a CGL Insurance Policy

According to a 2020 report by Statista, the market capability of the global liability insurance industry amounted to 3.3 billion USD from 1994 to 2017. This shows how many businesses have considered the importance of a proper liability policy over the years. With that in mind the reasons why you need such a policy are as follows:

CGL insurance covers damage to others’ property

CGL insurance protects you from liabilities arising from damage to a third-party’s property. For instance, while reorganizing your office space, you damage the walls and floors of the building you’re renting. Naturally, the landlord may sue you for thousands of dollars to recoup the cost of the damages. In such cases, your policy will make the payments to your landlord on your company’s behalf.  

affordable cgl insurance

Compensation for injury is provided by CGL insurance

Even if an injury occurs on your premises through no fault of yours or your employees, you may have to pay for the resulting medical fees and other compensatory costs. For example, a customer’s child is haphazardly running up and down your shop’s aisles. Despite telling the customer to stop their child, they end up tripping and fracturing their leg. Following the event, the child’s parents may sue you. Although you are clearly not at fault, you may find yourself liable for making certain medical payments. A CGL policy will cover such costs.  

Additionally, the policy covers all reasonable surgical, medical, professional nursing, hospital, and even funeral expenses brought about by injury and death to third-parties. The best part is that the coverage isn’t limited to physical injuries; it extends to overt injuries, including emotional distress and mental injuries.   

Advertising lawsuits

Take an example: You launch a website after working on it for a few months. Shortly after you make the website public, a company sues you for copyright infringement. CGL insurance covers your defense expenses as well as any settlement costs brought by such events. It also covers legal liabilities due to libel, slander, malicious prosecution, privacy invasion, and more.  

Multiple coverage options on your fingertips.

Choose from various options and select the policy
that best suits your requirement.

Product liability

Suppose you own a toy manufacturing company and you launch a new line of toys. Months later, several children are injured while using one of the new toys due to faulty assembly by their parents. Later, you find that proper assembly instructions and safety warnings weren’t included with the toy.  

In such cases, your company may quite easily be on the receiving end of a class action lawsuit, exposing you to a million-dollar liability. However, with CGL insurance your insurer would bear these expensive costs, keeping your business safe from financial tumult.  

cgl insurance business

Defense costs

Defending your employees or your company in court carries a great price. Following any allegations— whether genuine or frivolous—you may find yourself paying hundreds and even thousands of dollars. Not to mention the cost in time and loss of profits. But with CGL insurance, you’ll be able to avert defense costs (for an insured event) as your insurer will pick up the tab. Remember, no matter whether the allegations are legitimate or not, your insurer covers the burden of your legal defense.  

CGL Insurance is a basic requirement

Legally, states may require businesses to carry a CGL policy if they are a part of certain industries, such as construction. However, the policy is typically not state-mandated. Nevertheless, landlords, clients, or mortgage companies are likely to ask you to carry a CGL policy before entering into a contract with your business.  

For instance, before granting you a lease for office space, your landlord may ask you to show a certificate of insurance (COI). A current and valid COI assures your landlord that you are appropriately insured and can handle the costs of an unexpected lawsuit filed against your company.   

Attract projects and contracts with a comprehensive CGL policy

Having a CGL policy demonstrates that you’re responsible for the actions and outcomes of your business’s conduct. It’s a manifestation of higher safety standards that you implement to keep both your clients’ and your best interest at the forefront. As such, you can attract more client projects as well as other business contracts. 

cgl insurance what is

Does a CGL Policy Cover Your Property?

Any insurance with “liability” in it covers you financially in cases of loss or damage to third parties. However, it doesn’t protect your commercial property. Instead, you’ll need to opt for commercial property insurancecommercial auto insurance, and other specific insurance.   

Which CGL Insurance Should You Consider?

To keep your business safe from unprecedented costs, you can choose a combination of the following types of liability insurance:

Professional Liability Insurance

Cyber Liability Insurance

Product Liability Insurance

Employment Practices Liability Insurance

Workers Compensation Insurance 

General Liability Insurance

Directors and Officers Insurance

As soon as you start conducting business, you’re exposed to litigation risk. Whether you operate your business in an office space or out of your home, CGL insurance is one of the first things that business owners purchase when starting out.

The right CGL policy will help maintain the financial stability of your businesses when faced with a liability lawsuit. You’ll protect both your company’s dime and time.

Take a step towards securing your business by finding a local insurance agent today!

Multiple coverage options on your fingertips.

Choose from various options and select the policy
that best suits your requirement.

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