Overview of Commercial General Liability (CGL)
Commercial General Liability (CGL) insurance is crucial for businesses seeking comprehensive protection against the risks of liabilities imposed by lawsuits and similar claims. It covers bodily injury, property damage, and personal and advertising injury caused by the business’s services, business operations, or employees. This policy is a cornerstone for any small to medium enterprise (SME) risk management strategy.
Key Features of CGL Insurance
Premises/Operations Coverage: Protects your business from liability arising from accidents on your premises (such as customer slips and falls) or as a part of your business operations (such as damages during a service).
Products/Completed Operations Coverage: Covers liability arising from the products your business manufactures or sells or from completed operations in case something goes wrong after servicing or installation.
Why is CGL Insurance Important?
Provides coverage for bodily injury and property damage ensuring that, in most cases, the business owner does not have to pay out of pocket for claims.
Legal defense costs are typically covered, a critical factor if your business is sued.
Adhering to leasing or contract requirements as many clients and landlords require CGL coverage before engaging in business operations.
Regulatory Context and Compliance
Note: Regulations may differ based on location and business type.
In many regions, consistent with governance standards and risk management obligations under law such as the USA’s Sarbanes-Oxley Act or similar regulations in other countries, maintaining CGL insurance is advised or mandatory. Ensure compliance by consulting with a legal advisor or checking guidelines set by local or national business bureaus and industry-specific mandates.
For more information on regulations and compliance, businesses can refer to the U.S. Small Business Administration or oversight bodies relevant to their geographical location and industry sector.
Understanding Your Policy
Every CGL policy can vary significantly; hence, understanding your specific terms, coverage limits, and policy exclusions are imperative. It’s recommended to discuss with an insurance broker or legal professional familiar with your business magnitude and operations.
