Understanding Small Business Liability Insurance
Commercial General Liability
Commercial General Liability (CGL) insurance protects your company if the actions of you or your employee cause personal injury or property damage. CGL also protects your company if someone is injured on your property. The level of coverage your business needs and the premium you will pay depends on the level of risk inherent in your industry.
- What does CGL cover? - CGL insurance pays for your obligations, such as medical costs for personal injury or repair and replacement costs for personal property damage. In addition, CGL may cover legal fees, as well as possible compensatory and punitive damages awarded in the event of a lawsuit. Legal fees and damage awards can escalate quickly in the event of a suit or mediation.
- How much does CGL cost? – The greater your risk of liability, the higher your premium. Small business coverage can range from $500 per year to $3,000. It is important to shop around, but do not rely only on cost when selecting coverage. Carefully read the policy’s terms. Call your LegalShield provider law firm to have an attorney review the policy and the fine print before you sign.
- What coverage maximums would my business need? - Certain industries like construction, food services, and auto repair tend to require higher levels of coverage. Make sure your policy’s maximum coverage limits are high enough to cover the actual cost of any potential liability. If you exceed your maximum coverage amounts your company will be responsible for the remainder. It is possible to purchase umbrella policies that will increase your coverage.
- What happens if I need to file a claim? – Notify your insurance carrier and your LegalShield provider law firm immediately. Make note of the date, time and details of the incident, as well as the names and contact information for everyone involved. Do not sign any documents or agree to a settlement without first discussing the matter with an attorney.
- Do I need any other type of insurance? – Depending on the nature of your business you may need additional insurance. If you have employees, most states require you to pay for workers’ compensation and disability coverage. If your business involves driving or deliveries you may need commercial auto insurance. Some businesses may require product liability insurance. Home-based businesses are not protected by most existing homeowner’s insurance policies. It may be necessary to purchase home-based business insurance. Professional services, such as doctors, lawyers, or veterinarians, are often required to purchase errors and omissions insurance, also known as professional liability or malpractice insurance. Talk to your LegalShield provider law firm and discuss the need for other types of insurance policies to protect your business.
LegalShield provides access to legal services offered by a network of provider law firms to LegalShield Members through member-based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. See a plan contract at www.legalshield.com for specific state of residence for complete terms, coverage, amounts, and conditions. This is not intended to be legal or medical advice. Please contact a medical professional for medical advice or assistance and an attorney for legal advice or assistance.