Is Commercial General Liability Insurance Enough?

Because it covers the most common lawsuits that arise from everyday business activities, General Liability Insurance is often the go-to coverage for small business owners. But, is it enough to really protect your business?


A Commercial General Liability (CGL) policy covers three primary components: premises liability, products liability and completed operations.


  • Premises liability covers liability for accidental injury or property damage that results from either a condition on your premises or your operations in progress, whether on or away from your premises.


  • A products liability hazard exists for any business that manufactures, sells, handles or distributes goods or products. The hazard being the potential liability for bodily injury or property damage that arises out of your goods or products.


  • Completed operations covers your potential liability for bodily injury or property damage that arises out of your completed work.


However, it’s important to note that this coverage is dependent on the additional endorsements and exclusions listed in an individual’s policy. Endorsements and exclusions are documents attached to insurance contracts that add, remove or alter the scope of coverage. It’s smart to stay up-to-date on any new or existing endorsements that impact your commercial insurance policy. For instance, one exclusion contractors should be aware of is the “Your Work” Exclusion.


A business’s general liability policy will have its own set of limits and deductibles, which may require secondary coverage to cover what your general liability coverage does not. General Liability does NOT cover professional errors, employee injuries or damage to your business property. To cover these gaps, consider the following forms of additional coverage:


  • Professional liability insurance covers liabilities that arise from making professional mistakes, such as undelivered services and missed deadlines.


  • Workers compensation steps in to provide benefits for employees who suffer from work-related injuries or illnesses based on the type of illness or injury sustained.


  • Commercial property insurance can help cover the expenses to repair or replace your business’s property when it’s damaged by fire, theft and some weather-related events.


Ultimately, the goal of insurance is to protect your business from loss. Work with an experienced consultant at J.R. Prewitt & Associates to be sure that your business’s unique needs and liabilities are covered.

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