General Liability Insurance (GLI), also known as Commercial General Liability (CGL), is a foundational policy that protects businesses from financial loss due to third-party claims of bodily injury, property damage, and personal or advertising injury. This coverage is essential for businesses that interact with clients, customers, or the public, as it helps cover legal fees, medical expenses, and damages resulting from accidents or unforeseen incidents.
What Is General Liability Insurance?
Who Needs General Liability Insurance?
Virtually all businesses can benefit from General Liability Insurance, especially those that:
- Operate a physical location open to the public
- Interact with clients or customers face-to-face
- Work on client property
- Advertise or create marketing materials
- Sell products or services
Common industries that often require General Liability Insurance include:
- Contractors and construction
- Retail and e-commerce
- Hospitality and food services
- Consulting and professional services
- Manufacturing and distribution
What Does General Liability Insurance Cover?
General Liability Insurance typically covers:
- Bodily Injury: Medical expenses and legal fees if someone is injured on your business premises or due to your operations.
- Property Damage: Costs associated with damage to third-party property caused by your business activities.
- Personal and Advertising Injury: Protection against claims of libel, slander, copyright infringement, or false advertising.
- Legal Defense and Judgments: Covers legal costs, court fees, and any settlements or judgments up to the policy limits.
What Doesn’t General Liability Insurance Cover?
While General Liability offers broad protection, it doesn’t cover:
- Employee Injuries: These are typically covered under Workers’ Compensation Insurance.
- Professional Errors: Mistakes or negligence in professional services require Professional Liability Insurance.
- Auto Accidents: Incidents involving company vehicles are covered under Commercial Auto Insurance.
- Intentional Acts: Deliberate damage or illegal activities are not covered.
- Damage to Your Property: For protection of your own assets, consider Commercial Property Insurance.
How Much Does General Liability Insurance Cost?
Key Cost Factors:
- Industry risk profile
- Revenue and payroll
- Claims history
- Location and premises exposure
- Desired coverage limits and endorsements
Typical Cost Range:
The cost of General Liability Insurance varies based on factors like business size, industry, location, and claims history. On average: –
- Monthly Premiums: Approximately $42 to $85.
- Annual Premiums: Ranging from $500 to $1,000
Risk Management Tips
To minimize potential claims:
- Maintain a safe and clean work environment.
- Implement regular employee training on safety protocols.
- Use clear contracts and agreements with clients and vendors.
- Regularly inspect and maintain equipment and facilities.
- Stay updated on industry regulations and compliance requirements.