Comprehensive General Liability Insurance: What It Does and Does Not Cover Plus Cost Factors

Running a small business means planning for the unexpected. Comprehensive general liability insurance helps protect your company from costs related to accidents, injuries, and certain legal claims. From slip-and-fall incidents to property damage, this coverage can give small business owners confidence knowing they have support in place if issues arise. Let’s explore what CGL is and how it can safeguard your livelihood.

Key Takeaways

• Comprehensive general liability insurance is now commonly referred to as general liability insurance.
• It protects businesses from claims of bodily injury, property damage, and advertising injury.
• Medical payments coverage helps with immediate medical expenses for injuries on business premises.
• Exclusions include employee injuries, professional errors, auto accidents, and damage to business property.
• Additional policies like workers’ compensation, professional liability, or a Business Owners Policy (BOP) may be needed.
• Small business owners, contractors, and companies with customer-facing operations especially benefit from CGL coverage.
• Costs vary by business size, industry, risk level, and coverage limits.

What Is Comprehensive General Liability Insurance?

Comprehensive general liability (CGL) insurance, now more commonly called general liability insurance (GLI), is a type of coverage for businesses of all sizes. It helps protect against the financial impact of third-party claims, such as bodily injuries, property damage, or personal and advertising injury. GLI is different from other business insurance liability policies because it covers many types of liability claims, rather than focusing on one type of risk.

The word “comprehensive” was once used to describe the broad protection this coverage offered, but the industry has since simplified the name. Today, most people refer to it as general liability insurance. While the term has evolved, the purpose of the coverage remains the same: to provide protection against everyday business risks that could result in costly claims.

What Does Comprehensive General Liability Insurance Cover?

General liability insurance covers many of the most common risks small businesses face. While every policy is unique, they usually cover:

Bodily Injury and Property Damage

This helps cover costs if your business is found responsible for injuries to another person or damage to their property. For example, if a customer slips on a wet floor in your store or if a piece of equipment damages a client’s property, general liability insurance can pay for related expenses.

Advertising and Personal Injury

General liability insurance also extends to non-physical claims, such as slander, libel, or copyright infringement. If your small business is accused of harming another company or individual through advertising or other communications, this coverage can provide support for legal costs and potential settlements.

Medical Payments

If someone is injured on your business premises, medical payments coverage can help pay for immediate medical expenses, regardless of who is at fault. This helps address smaller incidents quickly and may prevent them from becoming larger claims.

What Doesn’t Comprehensive General Liability Insurance Cover?

While general liability insurance offers broad protection, there are some important limits to keep in mind. Common exclusions include:

• Employee injuries: Employees hurt on the job are covered by workers’ compensation insurance, not general liability.
• Professional mistakes: Errors or negligence in the services or advice you provide are not covered. These situations require professional liability insurance.
• Damage to business property: General liability applies to third-party property, not your own. Coverage for your office, equipment, or inventory comes from commercial property insurance, which is usually part of a business owners insurance policy (BOP).
• Auto accidents: If you or an employee causes an accident while driving a business vehicle, you’ll need commercial auto insurance to handle those claims.
• Intentional acts: Any damage or injury caused on purpose is not covered by any insurance policy.

Who Needs Comprehensive General Liability Insurance?

General liability insurance is one of the most common types of business coverage because it applies to so many industries and types of businesses.

• Small business owners: Even a single accident can create major costs for a small business. General liability insurance helps cover claims for injuries or property damage, giving owners peace of mind as they grow.
• Contractors and tradespeople: Working on job sites often involves higher risks of accidents or damage to client property. General liability insurance helps safeguard against claims that can arise while on the job.
• Companies with offices, storefronts, or customer interactions: Businesses that welcome clients or customers into their space face risks like slip-and-fall accidents. General liability insurance helps protect against the costs of these incidents.

Factors Influencing the Cost of Comprehensive General Liability Insurance

The cost of general liability insurance varies depending on the unique needs of your business. Your business size plays a role, since larger companies with more employees or multiple locations typically face greater exposure and pay higher premiums.

The industry you operate in also matters, as higher-risk fields like construction often cost more to insure than lower-risk industries such as consulting. Your overall risk level is another factor, especially if your work involves frequent customer interactions, physical labor, or heavy equipment that increases the chance of accidents.

The coverage limits you choose also affect costs; higher limits provide stronger protection but also increase the overall price of the policy.

Choose General Liability Insurance Through GEICO Insurance Agency

General liability insurance is one of the simplest ways to safeguard your business from unexpected costs. While it won’t protect against every risk, it’s the foundation of a strong business insurance strategy.

Ready to protect your small business? Call GEICO Insurance Agency today and see how easy it can be to find coverage that fits your needs.