General Liability Insurance
Let us help you get General Liability Insurance
It only takes a small accident to harm your business. How can this be prevented? A proper general liability insurance policy provides your business with the protection required when faced with a liability claim.
What is General Liability Insurance?
No matter your industry, whether you are a trade contractor, own a nail salon, or are simply a freelancer, a commercial general liability insurance policy (also referred to as CGL insurance) is one of the most important types of coverage you can buy.
Operating a small business exposes you to several different types of liability. The most common ones are bodily injury and property damage liability. Being exposed to liability means that you may be responsible for damages to a third party. Whether you think you are responsible or not does not matter, it’s the law that decides!
A lawsuit against your business can have a devastating impact on it. Not only can it have a financial impact, it can impact your reputation and even affect you personally.
Having the appropriate insurance coverage against general liability risks can help mitigate your business from the risk of losses. An insurance broker can help assess those risks and advise you on the right insurance coverage.
What does general liability cover?
As mentioned above, a commercial general liability insurance policy protects you from common day-to-day business risks, the two most common ones being third-party property damage and bodily injuries.
If the products or services your business sells cause damage to a third-party, you can be found legally liable for the losses suffered by the third-party. You will also be covered if your employees are the cause of the loss, whether they work onsite or offsite.
If you are sued, a CGL policy will generally cover the legal cost to defend yourself, even if you lose the lawsuit.
What is bodily injury liability?
Perhaps you are wondering what is bodily injury and how will my product or service cause bodily injury?
The most common example is the case of a customer slipping and falling at your establishment. This situation will surely bring about a lawsuit, for which you want a commercial general liability insurance policy to protect your business from the damages that may be paid.
Bodily injuries can happen to anyone that walks through your establishment such as employees, customers, suppliers, and delivery drivers.
You may think that your business will only be liable as a result of a negligent action caused by your business or employee. No matter the injury and whether negligence occurred, you can be liable.
If a customer at a grocery store breaks a bottle of oil and another customer slips within seconds of it happening, the grocery store can be held liable for the damages.
The financial damages can include medical bills, lost wages, and even pain and suffering.
What is property damage liability?
Property damage liability is more common than bodily injury liability, and the risk of financial losses can be even higher.
A common example for property damage is when a contractor is hired to perform a renovation in the house. They are in the process of bringing equipment into the house and scratch the brand new hardwood floors. A commercial general liability insurance policy will cover the cost to repair or replace the floors.
Depending on the type of product or service your business sells, the risk of property damage can be high. You want to ensure that you have adequate protection against the risk of financial damages.
Does my business need general liability insurance?
Many small business owners don’t know whether they need this type of coverage and others think it’s too expensive.
No matter your business, the service you provide, or where it’s located (even home-based businesses should have it!), a basic general liability insurance policy should be strongly considered.
If your business has an establishment open to comes in a lot of contact with third-parties, whether these are customers, suppliers, or other businesses, The consequences of not having a CGL policy outweighs the cost if:
- You have an establishment that is open to the public (even if it’s your home).
- You or your employees come in a lot of contact with third-parties, whether these are customers, suppliers, or other businesses at either your office or offsite.
- You sell goods.
- You sell physical services (e.g. landscaping, janitorial).
- You operate in an industry where you will be required to provide proof of insurance (e.g. contractors operating in the tradeshow industry have to provide proof of coverage in order to work on site).
How much does a commercial general liability insurance policy cost?
There is no one cost or one size fit all policy for general liability insurance. A policy for a small business with a $2,000,000 limit can start at around $450 a year. The cost increases based on the projected revenue, number of employees, and the business has previous insurance claims.
As you can see this is not a huge cost for a business given the benefits and protection it provides.
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General Liability Insurance FAQ
A commercial general liability insurance policy generally does not cover contractual liability, intentional criminal acts, liability caused by delivering professional services, or damages caused by patent infringement.
A policy may cover for tenant’s legal liability (damage to property that you rent) and advertising injury liability (damage caused by allegations of defamation or false advertising).
There are a number of factors such as the business’ years of experience, annual revenues, number of employees, and previous insurance claims among others. Contact us and we can explain all the factors and how they may impact your business!
The amount of coverage varies depending on the size, activity, and needs of your business. A lot of small businesses choose a $2 million policy. The greater the coverage, the higher the costs. Contact us and we can advise you on the optimal amount of coverage.