Every business, regardless of its size or industry, faces risks that could lead to financial losses. One of the most essential forms of protection against these risks is Commercial General Liability (CGL) insurance. It helps safeguard businesses from claims related to third-party bodily injury, property damage, and personal injury. However, while CGL insurance offers broad coverage, it does not cover everything. Understanding what is and isn’t included in your policy can help you make informed decisions about additional protection your business may need. If you need guidance, speaking with an insurance agent in Calgary can help clarify the right coverage for your needs.
What Commercial General Liability Insurance Covers
Commercial General Liability Insurance provides essential protection for businesses by covering a range of claims that could otherwise lead to financial losses. Below are some of the key areas it covers:
- Bodily Injury Claims. Accidents happen, and when a third party (such as a customer or visitor) sustains an injury on your business premises, CGL insurance covers medical expenses, legal fees, and potential settlements.
- Property Damage Claims. If your business operations accidentally cause damage to someone else’s property, CGL insurance can provide financial assistance. For instance, if a contractor accidentally damages a client’s home while working on a project, the policy can help cover repair costs.
- Personal and Advertising Injury. CGL insurance covers claims related to libel, slander, defamation, copyright infringement, and false advertising. If a competitor files a lawsuit claiming that your business harmed their reputation through misleading marketing, your policy can cover legal defense costs.
- Legal Expenses and Settlements. When businesses face lawsuits due to covered claims, CGL insurance helps pay for legal defense, court fees, and settlements. This can be crucial in protecting small businesses from financial ruin due to legal disputes.
What Commercial General Liability Insurance Does NOT Cover
While CGL insurance provides comprehensive protection, there are limitations to its coverage. Business owners should be aware of these exclusions to ensure they have adequate protection.
- Employee Injuries. Workplace injuries sustained by employees are not covered under CGL insurance. Instead, businesses must have Workers’ Compensation insurance to cover medical costs, lost wages, and rehabilitation for injured employees.
- Professional Errors and Negligence. If your business provides professional services, CGL insurance does not cover claims of errors, omissions, or negligence. For example, if an accountant makes a financial mistake that results in losses for a client, a Professional Liability (Errors & Omissions) policy is needed to cover such claims.
- Intentional Acts and Fraud. If a business owner or employee intentionally causes harm, engages in fraudulent activities, or commits illegal acts, CGL insurance will not cover any resulting claims or legal expenses.
- Auto Accidents Involving Business Vehicles. CGL insurance does not cover damages or liability resulting from accidents involving company-owned vehicles. A separate Commercial Auto Insurance policy is required to cover vehicle-related risks.
- Damage to Business-Owned Property. While CGL insurance covers damage to third-party property, it does not cover damage to the business’s own property. Business owners must purchase Commercial Property Insurance to protect their equipment, buildings, and inventory.
- Cyber Liability and Data Breaches. If a business experiences a cyberattack or data breach, CGL insurance does not provide coverage. Cyber Liability Insurance is necessary to cover expenses related to data recovery, legal fees, and customer notification costs.
Do You Have the Right Coverage?
Every business has unique risks, and a standard CGL policy may not provide sufficient protection. Business owners should assess their needs and consider additional policies such as Professional Liability, Workers’ Compensation, Cyber Liability, and Commercial Auto Insurance. Consulting with an insurance agent in Calgary can help determine the right mix of coverage to safeguard your business.
Commercial General Liability insurance is a crucial safety net for businesses, but it is not all-encompassing. Understanding what is and isn’t covered ensures that you are not left vulnerable to unexpected financial burdens. To build a comprehensive insurance plan tailored to your business, work with an experienced insurance agent in Calgary who can guide you through the complexities of business insurance.
