Commercial General Liability Insurance Cost, Coverage & Providers

Commercial general liability insurance (CGL) protects businesses from financial losses due to third-party claims for bodily injury or property damage, making it is one of the most important insurance policies any business will buy. Commercial general liability insurance costs vary, but the majority of small business owners pay between $400 and $600 per year.

Getting commercial general liability insurance (CGL) for your business is easy with The Hartford. Their team of specialists understand risks associated with different industries and focus on your business’ unique risks. The result is getting the right coverage at an affordable price. Get a free, no obligation quote online in minutes.

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Commercial General Liability Insurance Providers

When looking for a commercial general liability provider, you’ll speak to insurance agents, brokers, or both. Agents represent one insurance provider, whereas brokers can work with multiple business insurance carriers. Find a carrier that understands your business with vast experience in your industry.

Top Commercial General Liability Insurance Providers

Five of the top commercial general liability insurance providers for small businesses include:

The Hartford

The Hartford is a national leader in commercial general liability and has the financial stability that gives customers confidence claims will be paid. The Hartford also offers top-rated customer service and expertise in a number of industries. The Hartford offers commercial general liability as a standalone policy or bundled into its business owner’s policy.

The Hartford is the best choice for business and personal services businesses with low-risk office locations such as consultants, accountants, and graphic designers. Its large appetite for this type of business means competitive pricing for business owners seeking to get the broadest coverage for the lowest cost.

CoverWallet

CoverWallet is an online broker that maintains carrier relations with the top commercial insurance carriers in the U.S. They are able to write business policies in all 50 states in all lines of insurance, including commercial general liability, business property, workers’ compensation, and professional liability insurance.

CoverWallet is a great fit for any service provider going into other businesses or homes such as janitorial, cleaning, or pool services. They also have a large appetite for businesses such as hair and nail salons, making them competitive in industries have slightly higher risk exposures but claims are often lower in value.

Insurance321

Insurance321 is a leading business insurance broker for online quote services. The company takes one online application and then assigns an account representative to the small business. This is to ensure that Insurance321 has a full business picture to shop for the right insurance coverage. Insurance321 writes insurance for all lines of business insurance.

Insurance321 is the right choice for professional services providers who need both general and professional liability insurance, such as CPAs, architects, and internet security companies. These types of businesses benefit from the single application process that determines the need and then covers it with one or more insurance companies to ensure there is no gap in liability coverage.

Hiscox

Hiscox is a small business specialist offering all lines of commercial insurance from commercial liability to errors and omissions insurance. As a carrier, Hiscox is laser-focused on micro- and small business owners, including solopreneurs and independent contractors needing the right coverage on a small business budget.

Hiscox is the right fit for artisans and general contractors. The company offers competitive pricing for the single-man operation who needs coverage and regular certificates of insurance for contract work. Hiscox policies are easily managed online with certificates of insurance (COIs) available on demand.

AP Intego

AP Intego is an innovative insurance broker leading the way with pay-as-you-go insurance services, all managed in an easy-to-use online portal. This broker works with A-rated providers in all lines of commercial insurance. AP Intego is constantly look at ways to give business owners an edge when it comes to buying and managing business insurance.

AP Intego is the best fit for food and drink establishments such as restaurants, coffee shops, and cafes. Increased foot traffic combined with cooking increase general liability risks and potential third-party claims for food-borne illness. AP Intego’s pay-as-you-go platform is also widely valued by restaurant owners with high staff turnover, reducing workers’ compensation stress.

What Commercial General Liability Insurance Covers

Commercial general liability (CGL) insurance pays the costs of third-party claims of injury or property damage. While these slip-and-fall claims are the most common, CGL insurance also protects a business for claims of slander, libel, and advertising injury. Not only does it pay any third-party claims or settlements, it also covers the legal defense costs for the business.

Commercial General Liability Coverage

The main areas of commercial general liability insurance coverage include:

Medical Payments

If someone is physically injured on the business’ premises, regardless of negligence, the injured party is entitled to medical bills being paid. That party could potentially get a settlement for more serious injuries or incidents leading to death. Slip-and-fall cases are common examples of commercial general liability bodily injury claims.

Say an employee is mopping in your dance studio and forgets to put up a warning sign. If a customer slips, falls, and sustains injuries, they can sue your business for damages including medical payments, loss of work wages, and even mental anguish. The CGL policy pays these claims and the legal fees to fight fraudulent or excessive claims.

Property Damage

Incidents leading to property damage for third parties (customers, patrons, or bystanders) are covered by the CGL policy. This could be on-premises or off-premises during the course of business operations. This is not contingent on negligence by the business; a business can be found at fault but not negligent.

Let’s say you run a residential cleaning service. One of your employees is cleaning a wealthy customer’s home and accidentally breaks an expensive vase. CGL insurance would cover the cost of damages up to your policy limit less your deductible.

Personal & Advertising Injury

Personal injury is ruining someone’s reputation through libel or slander. Claims could be made from oral comments, statements made to customers, or even social media posts. When a business or its people make statements indicating another party is a “crook” or “irreputable,” they run the risk of a personal injury claim.

In an advertising campaign for your auto repair business, you compare yourself to a competitor. You state that your competitor has dishonest pricing. Your competitor finds this claim unfounded and sues you for defamation. A commercial general liability policy would cover your defense up to your personal damages advertising coverage limit.

Per Occurrence vs Aggregate Limits on CGL Insurance

Every CGL policy has both a per occurrence limit and an aggregate limit. These limits represent the dollar coverage caps in any given policy year. While many carriers have policies that start with coverage limits of $100,000 per occurrence and $300,000 aggregate, landlords and contract agreements often require a minimum of $1 million per occurrence and $2 million aggregate.

The per occurrence limit is the total amount the insurance company will pay per incident regardless of how many people were involved. The aggregate limit covers all claims in that policy year to the limit. It is possible to have multiple small claims that don’t exceed the aggregate limit.

What Commercial General Liability Insurance Does Not Cover

The primary coverage types included in a standard commercial general liability (CGL) policy protect against common general risk exposures, namely accidents. It does not cover specialized liabilities such as employment practices or business property.

These types of liability claims are not covered by CGL insurance:

• Employee injuries: General liability insurance does not cover employees who are hurt on the job. Employers need workers’ compensation insurance for employee injuries.
• Professional negligence: CGL insurance will not cover professional errors or malpractice liability claims. Errors and omissions insurance covers this type of claim.
• Liquor liability: A CGL insurance policy typically won’t cover any damages or injuries that result from alcohol sales or consumption. Liquor liability insurance may be available for an additional premium on some policies.
• Product liability: Also known as products-completed operations coverage, this involves any damages from the final product distributed and sold. Manufacturers and distributors require product liability.
• Commercial vehicles: Company vehicles require commercial auto insurance to protect against liability in at-fault auto accidents. Vehicles could include anything from a semitruck, to a fleet of company cars for a sales team, to a food truck.

Who Needs Commercial General Liability Insurance

Every business owner should have a CGL insurance policy in place for financial protection against unexpected, yet costly claims. While not every business is required to have insurance, if you lease property or have contracts with other businesses, chances are they will demand a certificate of insurance (COI) that shows minimum general liability limits of typically $1 million.

Here are a few examples of cases where business owners need general liability insurance:

• While visiting your business, a customer slips on a wet floor in your bathroom and sues you for bodily injury.
• An employee in your business damages the property of a client while working at the client’s home on a job.
• A fire starts in a space you lease and does damage to the entire building, damaging the property of other businesses.
• Your company is contracted by the local library to do the landscaping and requires a certificate of insurance.

For small business owners working from home offices, discuss general liability needs with your insurance agent. The family therapist working out of a guest suite may have limited coverage options through a homeowners policy, even with a business usage rider added. If a client trips on the property, the claim may get denied or not fully paid, leaving the home business owner on the hook.

Commercial General Liability Insurance Costs

For most small business owners, general liability costs range between $400 and $600 per year. However, depending on the size, type, or industry of the business, as well as the coverage limits and deductibles, some small businesses can pay more than $1,000 per year for a CGL policy. Different carriers have different pricing based on industry.

Commercial General Liability Insurance Cost by Industry

One of the biggest factors that affects the cost of CGL insurance is industry. Construction and cleaning services pay some of the highest premiums. This is because their work occurs on somebody else’s property and has dangerous equipment or supplies, and there is therefore a heightened risk of property damage. Retail stores and restaurants have high foot traffic, increasing risks such as slip-and-fall accidents or even food poisoning.

Home or office-based businesses like a graphic design firm usually pay the lowest premiums. This is because there is little foot traffic and minimal risk of property damage. On the other hand, there may still be a risk of personal injury from copyright infringement or defamation.

It is important to note that many home-based businesses use personal vehicles with car magnets or wraps to advertise. It is possible that a personal auto accident leads to a commercial general liability claim because the other party views the vehicle as a work vehicle and sees businesses as having more assets to grab.

Combining CGL Insurance With Other Business Insurance

CGL insurance protects against third-party claims, but there are many other risks a business faces and needs to protect against. The financial impact of an uncovered claim is often financially devastating. Most small businesses don’t have the financial resources to withstand more than a few thousand dollars in unexpected claims payouts.

Here are other business insurance policies types you may need in addition to CGL insurance:

Commercial Property Insurance

Commercial property insurance protects a small business against losses due to fire, theft, and vandalism. This is called first-party coverage, which means it’s for the business’ personal property. It covers the cost to replace or repair furniture, computers, materials, supplies, and inventory.

For example, a bakery has an oven malfunction and sets fire to the entire space. Their commercial property insurance pays to repair the building structure, bakery appliances, and all supplies and materials in the building. If a patron was hospitalized for smoke inhalation, the general liability policy covers that.

Business Owner’s Policy (BOP)

A business owner’s policy (BOP) is a combined policy—not a bundle of several policies. Instead of bundling general liability, business property, and business interruption insurance at one carrier, the BOP is one policy that combines all three policies into one. BOPs allow coverage customization for each area of risk but reduce underwriting and administrative costs, saving the business owner money.

For example, a local camping store has a child that climbs up on a display and falls. The child is injured, the display is damaged, inventory is destroyed in the fall, and the store is closed until the display is fixed, rendering the area safe again. With one claim on a BOP, all components of this incident are covered.

Workers’ Compensation Insurance

A small business with employees needs workers’ compensation insurance. Even sole proprietors may opt for workers’ comp policies if they would lose income if they are injured on the job. Workers’ compensation insurance pays for medical bills, lost wages, and rehabilitative services for employees injured at work.

For example, a security guard company contracted by a local nightclub is punched in the face by a belligerent drunk patron, breaking his jaw and nose. His medical expenses and time off from work are paid by the workers’ compensation policy.

Errors & Omissions Insurance

Many industries require errors and omissions insurance (E&O) or malpractice for medical professionals. This is a specialty liability policy that covers claims against a licensed professional for not properly conducting his job, leading to property damage or physical injury.

For example, an architect designs a building that the general contractor builds per the blueprint specifications. The architect miscalculated the weight-bearing needs of one wall, leading to a collapse. This is an error in professional duty leading to injury and property damage covered up to the policy limits in the claim.

General Liability Coverage Example

If a pipe bursts and floods two neighboring businesses, the per occurrence cap is split between the two businesses. Assuming the per occurrence limit is $1 million, the insurance pays both neighboring businesses up to that amount. If a second incident happens two months later with an elderly woman slipping and falling, this starts a new per occurrence limit up to the $1 million, not to exceed a $2 million aggregate.

If a small business is concerned about maxing out on any one per occurrence limit or the overall aggregate limit, it should consider getting added coverage through a commercial umbrella policy that would add liability limits on general liability, workers’ compensation, and commercial auto insurance policies.

Tips on Applying for Commercial General Liability Insurance

Although commercial general liability is a standard insurance product, insurance coverage requirements for small businesses vary by policy. This is because the insurance needs of each small business policy holder are unique. Therefore, it’s important to know how to shop for the right policy and to know what information to have ready before you begin.

Here are the three things to remember when buying commercial vehicle insurance:

1. Reduce Your Risk Exposures

Keeping claims down keeps general liability insurance costs down. Plus, many insurance carriers will provide discounts for well-designed and implemented safety plans. Take a look at the potential risk exposures and implement a plan to reduce injuries and claims. This might be as simple as a sign and yellow marking painted on an inconspicuous floor step.

2. Get Insured for the Right Amount

There is a saying many insurance agents use, “Double liability coverage does not mean double premium.” Consider the difference between $500,000 and $1 million in liability coverage. While you may pay a bit more for more coverage, you can offset it by increasing a deductible to make it more affordable. Paying an extra $1,000 in deductible is much more manageable than being on the hook for the extra $500,000 in a claim.

3. Include All Pertinent Information in Applications

Underwriters consider the information in the application part of a binding contract. Trying to undersell your risk could lead to claim denial. It is, in fact, considered insurance fraud. Every industry has specific questions to help underwriters evaluate how your business is different than others. If your cafe sells beer and wine, disclose this to make sure you are properly insured.

“Commercial general liability is the most common policy small business owners buy because the coverages it provides are tied to the most common incidents, such as a customer getting hurt on your property or from using your product, or even things like lawsuits and copyright issues. We also see a lot of businesses getting commercial general liability when applying for loans, renting office space, or when pursuing enterprise or large business clients who require general liability coverage in their contracts.” – Ed Baldwin, Founder and CEO, ProfileGorilla

4. Documents & Information to Have When Buying CGL Insurance

Gather the right documents to speed up the process of getting CGL insurance, including business registration, revenues, claims history, and the nature of business operations. Insurance carriers want to know how long you have been in business as well as how long owners or key managers have been in the industry.

Frequently Asked Questions (FAQs)

These are some frequently asked questions we’ve encountered and answers that might give you further insights. Our mission is to deliver the best answers to your questions.

What is the difference between commercial general liability & general liability?

Commercial general liability and general liability refer to the same claim coverage in business insurance policies. The term commercial distinguishes this policy from general liability that a homeowner would maintain. Liability policies cover policyholders from claims that happen in accidents or events on premises, or involving the insured or his representative (employees or family members).

Does commercial general liability insurance cover professional liability?

Commercial general liability does not cover professional liability. The CGL policy covers accidents leading to injury or property damage on premises while professional liability insurance, also known as errors and omissions, covers claims resulting from the failure to properly execute professional duties.

Does commercial general liability cover negligence?

Commercial general liability insurance covers incidental negligence such as forgetting to put the “wet floor” sign out after mopping. The CGL insurance policy does not cover gross negligence that demonstrate a reckless disregard for other people’s safety, such as setting a fire near a gas tank.

Bottom Line

A commercial general liability insurance (CGL) policy pays costs for claims where members of the public (third parties) are accidentally injured or experience personal property damage on a business’ premises. Claims and lawsuits can be hundreds of thousands, if not millions, in settlements, legal fees, and awards. Every business needs a CGL policy to protect against these potentially bankrupting events.

Save time and money by getting your CGL policy with a carrier that understands how to protect businesses and offers more bang for every policy buck spent. Visit The Hartford for a free, no-obligation quote. You’ll find their representative both knowledgeable and eager to find the right solution for your business.

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