As a business owner, you have an obligation to implement proper risk management within your operations. Safety practices and quality control help you not only protect the business itself, but also be responsive to your customers.
It is no secret that at times, your commercial mistakes could harm others. Even if you didn’t intent for these accidents to happen, it might still have been your negligence that led to the issue, and therefore it will be your responsibility to compensate the affected person for their losses. Most business owners are keenly aware of this risk and carry liability insurance as a safeguard against it.
Commercial general liability (CGL) insurance is the foundational liability benefit that most businesses need. If you are a small business owner, then you might get your CGL coverage as part of your business owners policy (BOP) package.
While BOPs offer a convenient way for business owners to get their insurance essentials, they are not all-encompassing. Though they will provide strong CGL benefits in most cases, the conscientious business owner will still have to customize and augment the policy to fit their individual needs.
Let’s take a closer look at how your BOP will provide CGL benefits, and what you can do to enhance and tailor them to your advantage.
What is liability insurance?
In a legal sense, liabilities are things that you are responsible for. In your business, your property and the money invested in the company are liabilities. However, your duty to your customers is also a liability.
There is always a chance that you could accidentally harm someone who doesn’t work for your business. This harm might be caused through your mistakes, or simply through negligence that, however innocent, still caused you to overlook safety hazards. In these situations, you might have a legal requirement to repay the affected party, and liability insurance is designed to help you do so.
What does general liability insurance cover?
General liability insurance is one of the primary benefits offered by BOPs. It is designed to protect businesses against the common liability claims that could occur in almost any operation. These usually include:
· Bodily Injuries: A common bodily injury liability claim is a slip-and-fall incident. Someone might trip over a piece of furniture or cord on your floor, lose their balance on a piece of loose flooring, or slip in a puddle that you didn’t notice. This coverage can help them cover their medical bills and other monetary losses that arise.
· Property Damage: You might provide a service where you handle someone else’s property. For example, you might be a painter who visits other people’s homes. In the middle of a job, some of your scaffolding might collapse, spilling paint on the floor and damaging the home. This coverage can help the customer pay for their damage.
· Personal Injuries: If someone claims that you libeled or slandered them, or caused them other personal harm, then you can use this coverage to compensate them.
· Advertising Injuries/Copyright Infringement: Your marketing might cause a competitor to allege you unfairly targeted them. You can use this benefit to compensate them.
· Product Injuries: When you manufacture items, an unnoticed flaw might cause them to harm someone. Should they sustain injuries, then you can compensate them.
· Completed-Operations Liabilities: When you provide a service, you might leave the job thinking that you did everything correctly. However, a mistake you made might cause a problem later. When it does, the client might sue you for their injuries or property damage. This coverage can make sure that you can repay them.
· Accidental Medical Payments: There are times when someone might get hurt in your business, but you had no fault in their losses. However, if they request assistance with their medical bills, then this coverage might still agree to compensate them.
Most policies also include legal assistance coverage. If a liability claim arises because someone sues you, then this coverage can help you afford a lawyer and cover the costs of their services. Additionally, it can help you cover the legal bills of the party who brings the suit, if necessary.
How much general liability insurance do I need?
All in all, you will use general liability insurance to protect your company’s bottom line in case of financial challenges brought by others. Therefore, you will have to customize your benefits to protect your company’s entire net worth in the event of a lawsuit. With the help of your agent, you can get a better idea both of where your coverage needs lie.
But don’t forget, even with a CGL policy in place, you will likely need other liability benefits. These might include:
· Hired/non-owned auto coverage
· Professional liability insurance
· Employee dishonesty coverage
· Cyber liability insurance
· Directors & officers liability coverage
· Commercial umbrella coverage
In many cases, you can add these benefits to your BOP as endorsements. However, in others, you will have to buy coverage separately. We’re committed to working with you to determine how best to combine these options with your general liability benefits so that they always offer exceptional protection.