what is cgl

What Is CGL? Your Guide to Commercial General Liability Insurance

Small businesses, on average, will spend $20,000 a year on lawsuits. This is for companies that earn about $1 million a year. Now imagine how much you would have to pay if you were a larger company. 

With this in mind, you want to make sure you have commercial general liability (CGL) insurance. This can cover many of the lawsuits your company could face. 

You may be asking yourself, what is CGL? In this article, we’ll explore what it is and what you need to know about it.

What is CGL?

CGL is a type of insurance that offers different options depending on your needs. You can opt to get all forms of coverage, but you may not need them all. 

There are three standard CGL insurance categories you can get coverage for:

Bodily Injury and Property Damage  

Bodily injury refers to damage received by a third party. This is someone not associated with your company. For example, this could include your customers, visitors to your establishment, or bystanders. 

Property damage pertains to any damage your company causes to someone else’s property. This doesn’t apply to your own property.

Personal and Advertising Injury 

Personal and advertising injury applies to intentional acts against you or your company. For personal injury, this could mean slander, libel, or copyright infringement. 

When it comes to advertising injury, this could be damage to your reputation. For example, disparaging information provided by your competitors that could hurt your credibility. 

Legal Fees

If you need to get a legal team together, this will have you covered. It’ll cover your defense costs and how much you need to pay your attorney. 

What Businesses Need CGL Insurance?

In some way or another, all businesses should have CGL insurance. It doesn’t matter if you are large or small. What can vary is what you need coverage for.

For example, if you don’t work offsite, you may not need property damage insurance. Alternately, if you’re a construction company, you will definitely want property damage insurance. 

The Cost of CGL Insurance

The cost of your insurance can vary based on how much coverage you need. A general range of how much you will pay for a year’s worth of coverage is $500 – $2,000.

Depending on how high of a risk your company is can determine how much you will pay each year. For example, if you’re a company that is likely to cause property damage (such as contractors).  

On top of that, your credit score can play a role. If you have poor credit you could find yourself having to pay more for your insurance. 

Don’t Focus on One Type of Insurance

Be aware that CGl does not cover everything your company will need to remain safe from liability. Here are just a few other policies you may want to look into acquiring for your company:

  • Worker’s compensation is for employee injury. CGL does not cover injuries sustained by your employees. 
  • Errors & Omissions (E&O) insurance is for professional errors. For example, failing to provide what you promised you would deliver by a set date and time. This insurance would cover that. 
  • Employment practices liability insurance (EPLI) is for employee claims. The claims are against a company or an individual who works at the company. For example, sexual harassment, discrimination, and wrongful termination. 
  • Commercial property insurance is for property damage (e.g. theft, fire, weather-related incidents).
  • Commercial Auto Policies would cover car accidents. For example, damage sustained by the car to individuals and property damage.  

Do You Need CGL Coverage?

What is CGL to you? Now that we have learned more about it, it is time for you to decide what you need. 

Reach out to us today to learn more, and to see how we can help you.