When insuring your business, you’ll need general liability insurance as part of your commercial benefits portfolio. A commercial general liability (CGL) plan is very expansive, but you cannot assume that it covers you against all potential liability claims. Exclusions and limits will exist under every policy.
Let’s take a closer look at how a CGL plan works, and what it doesn’t cover. In the end, knowing where your CGL benefits stop can help you determine your future insurance investments. At times, you might need to invest in more coverage than just a general liability plan.
The Basics of CGL Insurance
By buying a general liability insurance plan, you address the fact that you are able to take responsibility for problems that you might cause others who interact with your business. There is always a chance that you might negligently harm someone who interacts with your business (I.e. a customer). You will use general liability coverage under these circumstances to compensate those who sustained the loss.
Most CGL plans include:
Bodily injury coverage: Helps injured parties pay their medical bills if they get hurt in your business. It might also provide supplementary income.
Property damage protection: Pays for damage to someone else’s belongings that you cause through a mistake made in your services.
Other benefits can extend coverage to personal injuries (I.e. libel, slander, advertising injuries), or physical harm caused by your products or operations.
While these are essential, core benefits, they are not all-encompassing. Therefore, you might need to look elsewhere for more specialized liability benefits.
Expanding on Your General Liability Benefits
Opting to only buy a general liability insurance plan could put you in a tight bind; you might only have a limited set of circumstances during which you can make a claim. Therefore, you might need much more expansive coverage in order to get a higher level of protection.
More specific liability benefits to consider include:
Commercial auto liability insurance: This comes in a commercial auto policy and insures you in case you are at fault for an accident. In most cases, you’ll have to follow state law to get the right liability limits.
Workers’ compensation: Think of workers’ comp as liability protection against employee harm. Employees face risks in the business, and those who get hurt on the job often have a right to supplementary income. Workers’ comp lets you repay them.
Errors & omissions (E&O) protection: Professional service providers might make mistakes that lead to financial losses for clients. You can use this coverage to repay clients for losses.
Directors & officers coverage: If boards or high-level executives make mistakes, this coverage extends to their actions and protects their personal assets.
Ask your agent exactly how your standard CGL benefits can be expanded and augmented to create a more comprehensive level of protection. There are many types of hyper-specific liability coverage out there, and you can rely on your agent to guide you in the direction of the right ones.