Commercial General Liability Insurance protects a small business in the case of litigation for property damages or personal injury. Typically, commercial general liability covers damages from a lawsuit in addition to associated legal costs. Because today’s nation is progressively litigious where even small mishaps can result in large lawsuits, it behooves small business owners to be covered with commercial general liability insurance.
Who Needs Commercial General Liability Coverage?
The majority of small businesses are structured as sole proprietorships or partnerships, which puts the business and personal assets at increased risk. Keep in mind that a small business owner may become personally liable if he has signed a personal guarantee for a loan, have injured someone personally, acted in an illegal or irresponsible manner, or doesn’t operate his business as a separate and distinct entity.
How Do Commercial General Liability Policies Work?
Commercial general liability coverage policies for small businesses detail the maximum cap that an insurer will pay per incident, and the insured small business will be responsible for amounts over that maximum. Umbrella insurance can be added to pick up protection over the maximum commercial general liability coverage. General liability commercial insurance coverage can be purchased on its own or as part of a business owner’s policy, referred to as BOP.
What Does Commercial General Liability Insurance Cover?
Commercial general liability coverage protects small businesses from business liability and financial loss arising from bodily injury, property damage, personal injury, and advertising injury. It also covers the cost to settle or defend claims, including claims that are fraudulent. For example, if a customer is injured at your business site or if an employee is injured or causes damage at a client’s site, commercial general liability coverage provides protection. Even if your small business is liable or negligent for loss, injury, or damage to another’s health, property, or reputation, your business will be protected if adequately insured with commercial general liability insurance.