Commercial general liability insurance is an important form of insurance coverage that offers liability protection for business-related general business risks. This insurance protects the business owner from claims stemming from negligence, physical damage, or property damage that might occur on-site as a result of the business operation. This insurance also covers customers and employees in the event of injury on-site. Commercial general liability is used to protect the assets and the operations of a business, as well as its exposure to claims.
The three major components of commercial general liability insurance are: bodily injury and property damage, advertising and negligence, and legal fees. Bodily injury coverage provides compensation for personal injuries caused by the negligence, willful misconduct or dangerous behavior of a third person. Property damage coverage helps to reduce the cost of fixing or repairing a facility, building, or vehicle that is damaged or destroyed due to the negligence or wrongful conduct of another person.
Some examples of bodily injury and property damage include slip and falls, construction accidents, vandalism, and dog bites. In addition, legal fees can include workers’ compensation claims, premises liability claims, and malpractice claims. Advertising and negligence claims may include slander or libel, fraud or breach of contract. Other areas where commercial general liability insurance may be needed including product liability claims related to products that have defects and fail to perform as advertised, advertising claims related to false and misleading claims, and errors and omissions claims.
The second component of commercial general liability insurance is bodily injury and property damage liability. This portion of coverage typically provides coverage for accidents involving employees, tenants, and customers. It also covers businesses that rent their premises, such as hotels and apartment buildings. If an employee or customer is injured while on the premises, the business owner has the responsibility to provide medical care and settlement money to those injured. Similarly, if a tenant or client slips and falls on the property, the business owner must hire a professional to remove the debris and repair the floor or other physical damages.
As previously mentioned, there are many different types of bodily injury and property damage liability coverages. In addition to the typical coverage provided by most major insurance carriers, it may also be necessary to purchase additional insurance coverages, such as business interruption and property damage liability coverages. Business interruption coverage provides coverage during times when the workplace is closed, including vacations and business shutdowns. Property damage liability coverages may be required if the business owns a building in a damaged area or if the property itself is damaged.
Business owners may also want to consider purchasing additional protection against slander and libel and legal malpractice damages. These may cover the actions of competitors, errors and omissions, and failure to act or defend in a timely manner. Business owners who have employees may also want to consider purchasing workers’ compensation benefits for employees who are injured on the job. Many states require employers to provide some type of workers’ compensation benefits, and these can often be a good choice for businesses with a high number of injury-related claims.