Running a business involves managing various risks, making it essential to have the right protection in place. But what is commercial general liability insurance, and why is it so crucial? Simply put, commercial liability insurance shields businesses from financial losses due to claims involving injuries, property damage, and more.

Wondering “what does commercial general liability cover”? It includes a range of protections, ensuring your business stays secure when unexpected incidents occur.

What is Commercial General Liability (CGL) insurance?

Commercial general liability (CGL) insurance protects businesses against financial losses due to claims of injury, property damage, and other liabilities. This coverage is crucial for businesses of all sizes and industries. Here's a closer look at the core components of CGL insurance.

Bodily Injury Liability

Accidents happen, and if a customer or visitor gets injured on your premises, your business could be held liable. Bodily injury liability covers medical expenses, legal fees, and compensation for injuries caused by your business operations.

Property Damage To Third Parties

If your business operations cause damage to someone else’s property, CGL insurance covers you. This includes damage caused by employees or equipment during business activities.

Imagine a contractor accidentally damaging a client’s flooring while installing appliances. Without insurance, this could be an expensive out-of-pocket expense. These repair costs are covered by CGL coverage.

Product Liability

If your business manufactures, sells or distributes products, you could face claims of injury or damage caused by a defective product. Product liability coverage protects you from these risks.

For example, if a customer is injured by a malfunctioning device you sold, this coverage helps manage the legal and financial fallout.

Completed Operations

Completed operations coverage applies to claims arising after a project or service has been completed. This is vital for businesses in construction, repair, or installation services.

Tenant’s Legal Liability

If you lease commercial space, the tenant’s legal liability is critical. It covers damages you may cause to the rented property, such as a fire or water damage. This type of coverage ensures you meet your lease obligations and avoid costly disputes with your landlord.

Personal And Advertising Injury Liability

This coverage protects your business from claims related to libel, slander, copyright infringement, and other non-physical damages. For example, if a competitor accuses you of defamation in your advertising, CGL Insurance provides legal and financial support.

What is the difference between Commercial General Liability Insurance and General Liability Insurance?

While the terms are often used interchangeably, there are nuances between commercial general liability insurance and general liability insurance. Here's a breakdown.

Premises Coverage

Premises coverage focuses on incidents occurring on your business property, such as slip-and-fall accidents. It’s a critical part of both CGL and general liability policies.

Excess Liability Coverage

CGL policies often include excess liability coverage, offering additional protection beyond standard limits. This is particularly useful for high-risk industries.

Occurrence Policy

CGL insurance typically operates on an occurrence policy, covering claims for incidents that happen during the policy period, regardless of when the claim is filed.

Claims-Made Policy

In contrast, a claims-made policy requires the claim to be made during the policy period, limiting coverage for older incidents.

What does Commercial General Liability insurance cover?

CGL insurance covers a wide range of risks, including:

• Medical costs and legal fees for bodily injuries
• Costs for third-party property damage
• Legal defense against advertising injury claims
• Compensation for defective product-related damages

What is not covered by Commercial General Liability insurance?

While CGL insurance provides broad protection, certain liabilities are excluded:

• Employee injuries (covered by workers' compensation insurance)
• Professional errors (covered by professional liability insurance)
• Damage to your business property (covered by commercial property insurance)
• Vehicle-related claims (covered by commercial auto insurance)
• Understanding these exclusions helps you identify additional coverage your business may need.

How much does Commercial General Liability Insurance cost?

The cost of commercial general liability insurance depends on several factors. While it's impossible to quote exact prices, here’s what influences your premium:

Type of Business

High-risk industries like construction or manufacturing typically pay higher premiums due to increased liability exposure.

Location

Operating in a city like Houston or Dallas may affect premiums due to varying regional risks, such as population density and legal environments.

Revenue

Higher revenue often correlates with higher premiums since more revenue means greater exposure to potential claims.

Coverage Limits

Opting for higher policy limits increases your premium but provides greater protection for your business.

Who needs Commercial General Liability insurance?

Every business, regardless of size or industry, benefits from CGL insurance. Here are a few examples:

Small Business Owners

From retail stores to consulting firms, small businesses face daily risks that CGL insurance helps mitigate.

Sole Proprietors

Freelancers and independent contractors need protection from liabilities arising from their services or operations.

Large Companies

Larger corporations face increased exposure due to scale, making comprehensive liability coverage essential.

Construction Trades

Builders, electricians, and plumbers face high liability risks, making CGL insurance indispensable.

Restaurant & Food Service

With constant interaction with customers, food service businesses must protect against claims of injury or illness.

What other insurance coverages should your business add?

While CGL insurance is vital, additional coverages provide comprehensive protection.

Professional Liability Insurance

This covers claims of errors or omissions in professional services, ideal for consultants, accountants, and lawyers.

Workers’ Compensation Insurance

Mandated in most states, this covers medical expenses and lost wages for employees injured on the job.

Commercial Property Insurance

Protects your business assets, including equipment, inventory, and office space, from damage or theft.

Commercial Auto Insurance

Covers vehicles used for business purposes, including accidents, theft, and property damage.

Cyber Liability Insurance

Protects your business from the financial fallout of data breaches or cyberattacks.

Why is Commercial General Liability insurance important?

CGL insurance is a cornerstone of business protection. Here's why it’s indispensable:

Keeps Your Business in Compliance

Many contracts and licensing requirements mandate liability insurance, ensuring you meet legal obligations.

Your Commercial Lease Might Require It

Landlords often require tenants to carry liability insurance, protecting their property from potential damages.

Lets You Focus on Growing Your Business

With insurance in place, you can concentrate on operations, knowing you’re protected from unexpected liabilities.

Need Commercial Liability Insurance Coverage? Get A Quote From Hotchkiss Today

Protecting your business with the right insurance coverage is a critical step in managing risks and ensuring long-term success. Commercial liability insurance in Texas provides essential protection against claims involving injuries, property damage, and more, giving you peace of mind and allowing you to focus on growing your business.

For reliable and tailored coverage, Hotchkiss Insurance is here to help. With offices in Houston, San Antonio, Fort Worth, Lubbock, and Dallas, they offer expert guidance and comprehensive policies for businesses of all sizes. Contact Hotchkiss Insurance today to get a quote and safeguard your business.