Whether you own a company, are a consultant or skilled tradesperson, there will always be inherent risks involved in any line of business, which could result in financial repercussions. That’s why commercial liability insurance is crucial to have in order to help mitigate potential, unforeseen risks, protecting you and your business operations overall. Read on to learn more about how to give your business the best line of defence with the right coverage.
What Is Commercial General Liability Insurance?
When you operate a business, even as a contractor, you become liable or responsible for certain damages that could happen to a third party, such as a customer. And the reality is, in some scenarios, even if your business didn’t technically do anything to cause damages, you could still be held accountable and end up with a lawsuit.
Commercial general liability (CGL) insurance was designed for this purpose. If you’re found legally responsible for damages to property or a person, whether it’s from a product, a service you provided or from someone being in your commercial space, it can cost you a significant amount of money. CGL insurance coverage can offer protection to your business against such claims and financial loss.
How CGL can Safeguard your Business
Different scenarios can occur during your day-to-day operations, which may hold you responsible. The types of circumstances you encounter can largely depend on what your business entails. Here are some examples of liability you may encounter that require coverage to ensure the stability and security of your company and assets:
Property Damaged Liability
Property damage liability is important to have, especially if you operate a brick-and-mortar business. Even when you take all the necessary precautions to maintain a safe and professional business, accidents and damages to other people’s property can still happen at your fault. And when they do, you could face expensive legal fees.
Commercial liability insurance will help cover you in case someone makes a claim against you for damaging their property on or off-site. Here are some scenarios where this may occur:
- Workers removing snow accidentally damage a parked vehicle.
- Installers or movers working in a client’s home knock over an expensive item that breaks.
- A mechanic damages a customer’s car when they drive it into the garage.
- A contractor is accused of worsening a home’s structural foundation in the process of doing maintenance and repairs.
No matter the size of your business, it’s important to have your bases covered against unforeseen risks like these that you could be held accountable for.
Bodily injuries can happen to anyone who is physically at your business or involved in your operations off-site, including employees, customers, maintenance personnel, or delivery vendors. If someone gets injured while on your property or as a result of your operations, they could have the means to sue for compensation for their injuries, even if there was no direct cause. It’s just another reason why CGL insurance is so crucial to have in case you face legal action. Here are some examples of accidental injuries causing liability:
- An employee forgets to place a caution sign on a freshly mopped floor. If a customer slips and gets injured, they can sue for liability.
- The stairs in your facility have unsafe railings that are not up to code, and a third party falls while climbing them, causing injury.
- A chemical used for pest control in a client’s home causes sickness.
- An object, like a light fixture, falls on a shopping customer and injures them.
CGL insurance can provide coverage if customers or clients are injured or fall ill because of your products. This will help you with legal and medical costs that may come with a lawsuit. Here are some examples of product liability claims:
- You own a restaurant, and your accidentally undercooked food causes food poisoning.
- The PPE you manufactured or sold provides inadequate protection for users, leading to an injury that should have been prevented by this equipment.
- You sell or manufacture a haircare product that causes scalp damage and hair loss for a customer.
- The packaging of your product contains harmful chemicals that cause users to fall ill.
Reputational and Advertising Injury Liability
In the event that your company goes public with forms of libel or slander, you may be sued for the reputational or personal harm evoked by your actions. Here are some situations where this may occur:
- Your business makes a public defamation statement about another individual or company.
- You take advertising or marketing materials from another business or violate copyright.
- Your business publishes information that exposes an individual’s private information.
Other Liability Coverage
Commercial general liability insurance typically covers the above situations, but there are other types of liability to consider, depending on the nature of your business. Speak with your insurance broker to see if any of the additional following coverage is right for you.
Commercial Auto Insurance
You should have commercial auto insurance if your business conducts off-site work and uses business vehicles to get around or deliver goods. It doesn’t matter if your business has one vehicle, a large fleet or trucks — any business-related vehicles should have commercial auto coverage. This will include physical damage and liability coverages such as:
- Bodily injury liability
- Property damaged liability
- Medical payments
- Comprehensive physical damage
- Collision coverage
If you own condos or an apartment complex, tenant liability can cover the cost of repairs and replacements in the renter’s unit. This can include broken appliances, plumbing and electrical issues, and broken fixtures.
What is Not Covered by CGL Insurance?
Generally, the following scenarios will not be covered under most commercial liability policies:
- Intentional criminal acts
- Contractual liability (when contract violations occur)
- Patent infringement (using the ideas of a patented product as your own, without compensating the patent holder)
- Professional liability (if you provide advice as a lawyer, coach, or consultant, you may want protection from lawsuits that arise due to your errors and omissions)
Protect Your Investment
You put a lot of hard work into establishing your company and helping it thrive. But the reality is every business encounters risks every single day. One simple mishap could lead to financial consequences that could wipe out your assets and leave your enterprise in ruin.
Having the right coverage is the best way to safeguard your investment and gain peace of mind. If you need commercial general liability insurance, contact us at Tanner Insurance today. Our team will work with you to get the tailored coverage that your business needs to stay protected.