Liability Insurance FAQs
It’s better to know and be confident than to not know and be unsure. Liability insurance comes in many different forms, but even your basic commercial general liability insurance can be confusing. Sharp is here to straighten out the edges and answer some FAQ’s.
What isn’t covered by my CGL insurance policy?
Commercial general liability insurance is designed to cover a business for accidental injuries and damages occurring to third-party, as well as legal expenses during a suit. This can also include claims of slander, libel, and even advertising injury. However, a CGL policy won’t cover property damage to a business’ own structure (you’ll need commercial property insurance for that) nor will it cover intentional/expected damages by the insured. It will also not cover businesses for damages or injury as a result of intoxication, automobiles, pollution, damage to business work, etc. This is where having additional insurance is highly recommended.
TLDR, what isn’t covered by your CGL policy includes:
- Intentional damages
- Property damage
- Contractual liability
- Cyber attacks
- Professional services
- Motor vehicles
- Patent infringement
- Intentional criminal actions
- Loss of revenue if you’re shut down
- Acts of war
- Civil unrest
What are some examples of a commercial general liability insurance claim?
Reckon a guest were attending your retail store and was checking out the products you had on display. They walk down an aisle that was recently mopped by an employee, but no “wet floor” sign was placed. They slip, fall, and break their arm. They sue your business for their injuries and negligence in failing to provide a warning for the wet floor. In this instance, your commercial general liability insurance policy would likely cover you for any resulting costs.
Is commercial general liability insurance mandatory?
No, it isn’t. Commercial general liability insurance is only a recommendation, although we consider it a crucial purchase! Other business liability insurance policies, such as errors and omissions insurance, may be mandatory depending on the industry you operate in. Moreover, some clients or business partners could refuse to work with you without proof of insurance first!
How do I get lower rates for my CGL insurance?
There’s a few ways. First and foremost, enlist a broker! They’ll know how to find the best insurance policies and coverage for your circumstances, while giving you an insider look on what goes into your rates and how to make small changes for better prices.
Here’s a few tips:
- Practice proper risk management. The less claims you make, the less your rates will increase. Risk management can look like proper employee training, identifying and mitigating risks, avoiding situations where a risk is likely to occur, etc.
- Shop around for insurance quotes with the help of a broker. Buying insurance shouldn’t be a one-and-done situation.
- Ask your broker about eligible discounts. Discounts may be available to return customers, loyal customers, business owners that are a part of a certain group, if you have multiple commercial policies through the same provider, and more.
What types of businesses need liability insurance?
Every business. If you’re selling a product, or a service, or – well, anything, really, you’ll need business insurance. That goes for contractors, professional services, retail businesses, wholesale/distributors, real estate companies, fitness centres, and so much more.
What are an advertising and personal injury?
Personal and/or advertising injury basically damages arising from infringement of privacy, alleged slander or libel on your advertisement, invasion of privacy, etc.
When does a commercial general liability insurance policy kick in?
A CGL insurance policy may kick in when a person that is involved under your business liability insurance policy becomes involved in an insurable incident during the course of your business’ operations. Covered incidents can occur at your work site, on your premise, or even at a client’s home as a result of work you or an employee is completing.
Why do I need commercial general liability insurance?
To cover your bottom line. If you interact with clients, use equipment, or represent a client’s business, it’s imperative to purchase CGL insurance. Lawsuits nowadays are expensive and can range into the tens of thousands, if not millions of dollars, so it’s better to be safe than sorry and avoid any chance of getting involved in a potential lawsuit.
What other business liability insurance policies do I need?
Business liability insurance encompasses a wide number of different commercial liability options. You could look into the following with a broker:
- Product liability insurance
- Pollution liability insurance
- Crime insurance
- Cyber liability insurance
- Liquor liability insurance
- Errors and omissions insurance
- Commercial auto liability insurance
- Contractor liability insurance
This is just a small sampling of some of the liability coverages available out there. Depending on what your business does and its needs, consult with a broker to discuss the benefits of these!