What is Commercial General Liability Insurance?

March 13, 2023

What is commercial general liability insurance exactly? Essentially, it’s the policy that covers you if you are sued because of a business-related accident or mishap. Some examples of when this might happen include if your customer falls and gets hurt in your store, or if you cut someone with your employee’s poorly sharpened scissors at the salon. As you can see, there are many ways this type of liability could come into play in your business, which is why it’s important to make sure you have this kind of coverage on hand before opening up shop or otherwise taking on customers or clients.

Types of commercial insurance liability

Commercial general liability insurance is a type of insurance that protects businesses from liability for damages arising from injuries or property damage caused by the business's products, services, or employees. There are three main types of commercial general liability insurance:

• product liability

• professional liability

• premises liability

Product liability insures against physical injury or property damage that occurs because of the use of a company's products. Professional liability provides coverage for medical malpractice, errors, and omissions in accounting, law, engineering, and architecture practices. Premises liability covers accidents that happen on your business property.

One thing to keep in mind about this type of insurance is that it won't cover any accidents outside of your office building or facility; if you have an office space with parking lots and no security system, then you may want to consider adding property protection as well.

Difference between commercial and general liability

Commercial general liability insurance is a type of insurance that businesses can purchase to protect themselves from liability risks. General liability insurance covers a wider range of risks than commercial liability insurance, but it does not cover all risks. Commercial general liability insurance covers the following risks: bodily injury, property damage, personal and advertising injury, and medical payments. But does not include protection for products you sell or for your premises or equipment (which are covered by product liability and premises/operations liability coverage).

You should be aware that many policies require you to report any claims within a certain time after they occur; otherwise, the policy may become void. In addition, commercial general liability insurance may exclude some types of damages like lost profits or punitive damages (financial awards intended to punish the wrongdoer). If you need this additional coverage as part of your policy, be sure to ask about it when comparing rates from different insurers.

Why do you need general liability insurance?

Commercial general liability insurance is a must for any business, no matter its size. This type of insurance protects your company from third-party claims of bodily injury, property damage, and personal injury, like false advertising. If your company is sued, general liability will help cover the cost of legal fees and any settlements or judgments that are awarded. Without this coverage, your business could be forced to close its doors for good. It’s important to note that there are two types of general liability: broad form and occurrence form. The broad form includes protection for claims arising out of injuries in which the claimant was not an employee or customer at the time of the accident; the occurrence form covers accidents happening during normal operations.

What does commercial general liability cover?

Commercial general liability insurance helps protect businesses from risks such as bodily injury, property damage, personal injury, and more. This coverage can help pay for things like medical expenses, legal fees, and damages if you're found liable for an accident. The standard form of commercial general liability insurance includes both broad and named perils coverage. The broad perils part covers losses due to fires, storms, explosions, theft, etc., while the named perils cover losses due to specific events like products sold or faulty workmanship. Some policies will offer extra protection against lawsuits brought by employees. Some common exclusions are product liability and professional services, which are not covered by most policies.


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