Here's What You Need To Know About Commercial General Liability Insurance


Business owners work extremely hard to operate and they have to encounter many risks in different forms.
Some unexpected accidents and liabilities can cost your business in a larger scale. Commercial general liability is so designed to protect business assets and resources, should a claim arise.


Commercial general liability insurance (CGL) policies provide great protection to the policyholders and provide defence and indemnity coverages against claims for bodily injuries and property damages. You are aware that operating a business in a litigious society increases the chances of filing lawsuits and claims in the court of law. These lawsuits will result in great financial losses. If you have a commercial general liability insurance to protect your business you can concentrate on your business prospects and development.

Coverage Options:

A commercial general liability insurance covers during the following situations.

● Lawsuits
● Investigations
● Settlements
● Property damages
● Medical expenses on injuries
● Compensations
● Losses on rental property
● Advertisement injuries
● Claims for copyright infringements.

Benefits of a CGL:

Insurance companies are aware of your business insurance needs and the risks faced by every type of business. When providing a business insurance to a business, these companies give weightage to quality control, safety standards and risk management.
Accordingly, they will suggest you the insurance type you need after hearing from you about your business exposures, risks faced, products produced and the like.

Bodily injury coverage will provide cover for the injuries sustained by you or by the visitors, if they are caused by your business operations.

Personal injury and advertising injury coverage will protect you from the claims of slander, libel, false arrest, defamation cases caused by your advertisement to others and the like. Due to your advertising of the products and services of your business, some people may be affected or their reputation may be spoiled. Advertising injury coverage will protect you from these situations.

The important thing is that your business should be properly protected by a proper business insurance coverage and commercial general liability insurance cost is a secondary concern.

Commercial General Liability Insurance Average Cost:

As far as commercial general liability insurance average cost is concerned, the median cost of a CGL may range from $425 to $921 per year and the annual average cost may range from $483 to $2758. This is only a rough estimate and the premium costs are determined based on several factors such as size, nature of the businesses and more.

Consider a small IT company with 2 to 5 employees. Let the annual revenue range between $25,000 to $1,000,000. For this firm annual average commercial general liability insurance cost might be $1110 per year and medium CGL cost may be $538 per year.

Suppose the IT consultant has more than 6 and less than 10 employees with annual revenue between $3 million and $10 million, the same figures would be $2758 and $921 respectively.

Commercial General Liability Insurance Limits:

Understanding commercial general liability insurance limits is very much important for any business. The general aggregate limit of an insurance policy is the maximum amount of money an insurer will pay out during a policy term. If the costs of judgements, legal claims, awards, etc. crosses the limit of your policy coverage, then the insurer will not be responsible for expenses that go beyond the coverage limit of a CGL.

The aggregate limit applies to covered incidents such as bodily injury, property damage, personal injury and advertising injury excluding injuries related to products and completed operations. Damages paid for medical expenses are also included in the aggregate limits. When you exhaust the aggregate limit of a CGL, then the insurer will not cover those losses that come under the above mentioned categories.

In general, a CGL policy breakdown will be as follows.

● Total coverage limit per occurrence----------------------------$1,000,000
● Total coverage limit (annual aggregate limit)-----------------$2,000,000
● Personal and advertising injury limit per occurrence-------$1,000,000
● Completed product coverage limit (annual aggregate)----$2,000,000
● Damage to rented premises coverage limit-------------------$300,000
● Medical expenses coverage limit--------------------------------$10,000

Your business may have even ten claims totalling $2,000,000 or less. Now you are safe as the claims lie within the aggregate limit. Sometimes, a single legal claim may exceed $2,000,000. Then you will be in great trouble. That is why many insurance providers offer higher coverage limits towards business insurance. You will be able to minimise your risk, if you buy a business policy with higher limits.

How much CGL you Need?

Each business is unique. Each business face different types of risks. All businesses need not buy all the types of business insurance. Similarly the amount of coverage will depend upon your specific needs. However, you must keep in mind that the cost of lawsuits and claims have soared to a great level. Nowadays people have begun to claim larger amount of damages and as such you have to consider buying a higher coverage limit for a commercial general liability insurance policy.

General Views:

As far as commercial general liability insurance cost is concerned, a small business can pay anywhere between $200 to $3000 per year, but most of the small businesses pays a cost that lies between $400 and $600 per year. Some of the industries pay higher premiums towards business insurance. For example, construction and cleaning services pay more towards CGL premiums because they have to perform their work mostly on the premises of clients.

There are chances for these workers to damage the properties of the clients by mistake. However, the company is liable for the damages caused. Similarly shops and restaurants have to pay higher premiums as bodily injury is common in these places of business. On the other hand home based businesses may pay lesser premium. Therefore, insurance premium cost depends upon the nature of businesses and the risks involved.


The main concern of any business is to protect their business from external and internal risks. Moreover, their assets are also to be protected. They should not be under false hopes that nothing untoward incident will happen to them. This is logically untrue. Only a proper and suitable business insurance can give the businesses enough protection.