What Does Commercial General Liability Insurance Cover? | JGS Insurance 

What Does Commercial General Liability Insurance Cover?

Commercial general liability insurance covers a company’s legal responsibility for its products and services.

Businesses that provide products or services to the public are typically required by law to have commercial general liability insurance. This type of coverage protects the business and its employees from lawsuits and other claims related to their products, services, or operations.

What is Commercial General Liability Insurance and Why Does it Matter to You?

Commercial general liability insurance, usually abbreviated to CGL, is a type of business insurance that covers the business against financial losses due to lawsuits and other legal claims. This can include bodily injury or property damage from accidents, as well as some other events.

Why Would You Need Commercial General Liability Insurance?

Commercial General Liability Insurance is important because it protects your business against all sorts of risks. It can cover you in case of lawsuits and other legal problems that could arise if someone gets injured while on your property or while using your product.

There are a number of reasons you may need commercial general liability insurance.

The most common reasons why people need commercial general liability insurance include:

  • You want to protect yourself from lawsuits
  • You want to protect your assets and property
  • You want protection against the cost of defending yourself in court
  • You need coverage for claims made by others

Situations in Which You Would Need Commercial General Liability Insurance

Some of the reasons you may need CGL include the following.

Interacting With Customers

If you or your employees interact with customers in any way, CGL is a must. This will protect you and your team if anything happens that causes injury to a customer or their property.

Creating or Distributing a Product

If you supply anyone with a product, you’ll want to have CGL. This will cover you if the product causes damage or injury to a consumer. For example, if you sell cosmetics and someone sues you for having an allergic reaction.

Advertising Your Business

One of the most common causes of advertising injuries is libel or slander. These injuries may result from publishing inaccurate information or violating a person. If you are sued because of anything connected to advertising and this policy is not in place, you are responsible for defending yourself.

You Own or Work Out of a Premises

Chances are, you’ll have somewhere that you call your base. Whether that just be a head office or a store for customers to visit, you’ll want to make sure that you’re covered for any accidents or injuries that may occur on the premises. If you’re sued for medical expenses by a customer who slipped and injured themselves on your freshly mopped floors, if you have CGL, you’ll be covered.


If your business involves using equipment, and that equipment can cause damage to someone’s property or injury to them, your CGL will cover those incidents. An example of a situation where this may come into play is if you are using a truck to deliver goods and the driver backs over someone’s foot.

Business Operations

If you are conducting business and you cause damage to someone else’s property or injure them, your CGL will cover those incidents. An example of a situation where you may need CGL is if an employee accidentally leaves water running, causing damage to a customer’s home.

What You Need to Know Before Buying Commercial Insurance

CGL provides protection against losses that may result from claims of bodily injury, property damage, or other damages. These claims can be made by customers, vendors, employees, or anyone else who is involved in a business transaction.

There are many different types of commercial insurance policies available on the market. In order to get the best deal, it is important to know what you need and what your budget is.

How Much Commercial General Liability Coverage Do You Need?

Typically, a small to medium-sized businesses tends to need at least $1 million in commercial general liability coverage, but this varies depending on your specific needs.

If your standard CGL doesn’t provide as much coverage as you think you need, you can opt to add on a commercial excess (umbrella) policy, to bridge the gap.

How Much Does Commercial General Liability Insurance Cost?

Commercial General Liability insurance can be purchased by itself, either as a part of a Business Owners Policy (BOP) or as part of a Commercial Package Policy (CPP). It may be cheaper to bundle your policies together.

The cost of CGL insurance varies depending on a number of factors such as industry and risk level. It can also depend on how much coverage you need. Generally speaking, the more exposure your business has to risk (e.g., if you have a lot of employees or customers), then the higher the premium will be for your General Liability Insurance.

What Protections Can a Commercial General Liability Policy Offer?

A commercial general liability policy can provide coverage for bodily injury and property damage liability, personal and advertising injury, medical payments, and other claims. The policy also includes coverage for legal defense costs in a lawsuit or arbitration proceeding.

This type of insurance covers a wide range of risks associated with the business’s operations such as lawsuits over product defects, premises liability cases, construction site accidents, employee injuries at work sites, slip-and-fall cases on public property, or private property not owned by the insured, and more.

Coverage A: Bodily Injury and Property Damage Liability

This provides legal liability coverage for damage to property or injury to people that occur on your business property, or during business operations. It also covers mental and emotional distress, as they may count as bodily injuries.

It only covers damage that occurs due to non-professional negligent acts. Professional mistakes would be covered under an additional endorsement.

Coverage B: Personal and Advertising Injury

Personal and advertising liability insurance protects your business against any liability that may occur due to certain offenses. These can include, but are not limited to:

  • copyright infringement
  • false arrest
  • invasion of privacy
  • libel
  • malicious prosecution
  • slander
  • use of another’s advertising idea
  • wrongful eviction

Coverage C: Medical Payments

The final part of CGL insurance is part C. This covers payments for non-employees’ medical expenses if they are injured either at your premises or due to your business operations. It covers all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing, and funeral expenses for a person injured or killed due to an accident that occurs in relation to your business. Coverage is provided on a no-fault basis, so there is no legal liability coverage.

What Are The Limitations & Exclusions of a Business General Liability Policy?

Business general liability insurance is a type of policy that protects the company against negligence lawsuits. It covers any damages that may be incurred by third parties due to the negligence of employees or accidents on behalf of the company. However, there are many limitations and exclusions associated with this insurance policy, for example, if an employee commits a crime while on duty, the company is not covered by their insurance policy.

Employee injuries and illnesses

You’ll need workers’ compensation insurance to provide coverage for employee injuries. Workers’ compensation insurance provides coverage for employees who have been injured on the job. This type of insurance is designed to provide financial assistance for medical bills and lost income.

Professional mistakes

These would be covered under an errors and omissions policy. E&O insurance is a type of insurance that you can purchase to protect yourself from claims of errors or omissions in your work. This type of insurance is especially beneficial for freelance writers and editors, but it can also benefit business owners who are providing financial services like investment advice.

Theft and damage

For theft or damage your business property, you’d want to look at commercial property insurance. This pays to repair or replace stolen, lost, or damaged business property. Oftentimes, you can bundle this with your CGL by purchasing

Liquor liability

If your business serves alcohol, any issues that arise from an intoxicated customer injuring themselves or others will not be covered as standard by your CGL policy. Consider adding this additional coverage to your policy to protect your business if you have anything to do with alcoholic beverages.

Pollution liability

If your business becomes responsible for any contaminants, irritants, or pollutants entering the environment, you’ll likely be responsible for the cleaning up too. Pollution liability is an optional endorsement that you can add to your policy to provide coverage for any fees you’re obligated to pay, with regard to pollution.


Read on to learn the answers to the most commonly asked questions regarding commercial general liability insurance.

Can you get commercial general liability insurance without owning a business property?

The answer is yes and no. Depending on the type of business, some companies can get commercial general liability insurance without owning a business property. For example, if you work for a company that has more than one location, you can get commercial general liability insurance without owning a business property as long as your work location is within the geographical limits of the policy.

Is general liability insurance required by law?

General liability insurance is not required by law, but it is a standard business practice. If you don’t have commercial general liability insurance then you will be liable for any fines or legal fees that arise.

What does general liability insurance cover?

General liability insurance protects the company from any lawsuits that may arise due to an injury or other damage caused by the company’s employees and property. The most common form of general liability insurance is property damage. It covers any damages that are caused to an individual or business’s property, whether it be physical, such as fire, or non-physical, such as defamation and invasion of privacy.

How much general liability insurance do I need?

That depends on a number of factors, including the type of business you conduct, as well as the risks that your business is exposed to. Speak to an insurance agent who can help you to determine how much coverage you need.

Do independent contractors need general liability insurance?

As an independent contractor, you are not eligible for workers’ compensation if you are injured on the job. In order to protect yourself from liability, it is important that you purchase general liability insurance.

How do I make a general liability insurance claim?

The first thing you’ll need to do is to contact your insurance company. Make sure that you have as much evidence as possible to support your claim. That may be in the form of photographs or case numbers.

What are some common general liability claims?

One common claim is negligence, which is defined as an act that falls below the standard of care a reasonable person would use in a similar situation. Another common claim is breach of contract, which occurs when one party fails to fulfill their contractual obligations.

Where can I purchase commercial general liability insurance?

Commercial general liability insurance can be purchased through an agent, through a broker, or directly from an insurance company. The cost of the policy depends on the size of the business, the type of coverage requested, and other factors unique to each company.

Who needs commercial general liability insurance?

Most businesses would benefit from getting a CGL insurance policy. Some businesses may have to carry this type of insurance, but it is not always required. However, for businesses that do not carry commercial general liability insurance, they are at risk of financial losses if they get sued or injured.

What can be done to avoid or reduce the risk of having a general liability claim?

There are many different ways to avoid or reduce the risk of having a general liability claim. One way is to have insurance coverage for your business, which will help you avoid paying for damages out-of-pocket. The other main way to prevent general liability claims is by following best practices and safety standards set by OSHA, which can help reduce your risk of injury and damage. General liability can also be reduced by adopting a risk management strategy, which is the most effective way of managing exposure to risk.