Compare quotes from leading insurers
Commercial General Liability Insurance combines public liability coverage + product liability coverage into one comprehensive policy.
Provide offers business owners the easiest & quickest way to get Commercial General Liability (CGL) Insurance. CGL Insurance is often requested as part of professional contracts. We’ll help you get comprehensive yet affordable CGL policies, so that you can easily win contacts and grow your business.
What does Commercial General Liability Insurance cover?
Commercial General Liability coverage is very comprehensive. It combines 3 major types of coverage into an one policy:
If your products cause bodily injury or property damage to others, you’ll be covered
Sums that you become legally liable to pay. This includes:
If your business activities cause bodily injury or property damage to others, you’ll be covered.
If your advertisements defame others, you’ll be covered
Do I need Commercial General Liability Insurance?
There are two common scenarios where Commercial General Liability Insurance is important.
1. CGL Insurance is part of contract requirements:
Commercial General Liability Insurance is very frequently requested for in contracts. Such contracts could be consulting contracts, IT contracts, or contracts that involve you selling your products to retailers/wholesalers. Very often, companies that request CGL Insurance are based in the USA, Canada, UK, European Union, Australia, etc. If you want to win these contracts, you’ll need to meet your client’s insurance requirements.
There are a couple of reasons that CGL Insurance is commonly part of contract requirements. The first concerns wholesalers/retailers who source goods from many different manufacturers. Examples include large retail chains, like Walmart in the US. These retail chains sell food, soap, over-the-counter drugs, and many other consumer goods. There exists a real risk that these goods could cause injuries, allergic reactions, poisoning, or other kinds of physical harm to their customers. If such bodily harm were to occur, injured parties could easily launch a personal injury lawsuit against the retailer and their suppliers. It’s thus a basic form of risk management to mandate that the suppliers carry CGL Insurance to protect themselves if such a lawsuit were to occur.
Another reason that CGL Insurance is often stipulated in contracts is to provide clients with financial protection. Sometimes, the work or products that the vendor delivers is unsatisfactory, which causes the clients to suffer losses. CGL Insurance provides clients with an avenue for financial compensation. Clients can initiate legal action against the service provider. If the client wins the lawsuit, then the vendor’s insurer will compensate them for their losses.
Carrying CGL Insurance isn’t just biased in favour of the client, though. Having CGL Insurance for the vendor is a positive outcome too, because the CGL policy will protect them from the costs of the lawsuit and the damages awarded to the client. It’s a win-win scenario. This way, both the client and vendor’s interests are protected by the CGL policy.
2. You have an inherent business risk that needs to be covered with CGL Insurance, otherwise you may suffer expensive lawsuits:
Commercial General Liability Insurance is also important if your business is exposed to specific types of risk.
The first risk exposure is your products causing injuries or property damage to others. This would apply if you are either a manufacturer, or wholesaler/supplier, of products. For instance, let’s say you manufacture electronic components. If your electronic components overheat and start a fire, that could easily result in bodily harm to users, and also damage other people’s property. CGL Insurance would thus be crucial to defend you from lawsuits related to such incidents.
The second risk exposure is your business activities causing injuries or property damage to others. This would apply if you perform installation work, servicing work, or any other kind of physical work at client premises. For instance, let’s say you manufacture hardware systems for use in factories. You also install this hardware in factories. If you damage someone else’s property while performing these installation works, you can be sued. CGL Insurance can defend you from such events.
Examples of companies with inherent risks that require Commercial General Liability Insurance:
- Companies that both supply construction goods, and perform construction work
- Companies that supply IT hardware, and install this hardware for clients
- Companies that supply engineering/manufacturing equipment, and set up/install this equipment for clients
You get the picture. As long as you perform both the supply of goods, and installation/servicing works related to those goods, you should carry CGL Insurance.
Do you provide Commercial General Liability coverage for Amazon sellers?
Yes. Amazon requires certain sellers to carry $1 million (or more) in Commercial General Liability Insurance. We currently assist numerous Amazon sellers with their insurance requirements. Speak with us to get a quote within 24 hours. You’ll be off to the races selling with Amazon in no time.
What are some claims examples?
Let’s take a look at some hypothetical claim examples. This will help illustrate how Commercial General Liability Insurance works.
Claim Example 1: Manufacturer of construction supplies sued
A manufacturer of concrete products was sued for defective goods. The concrete supplies were not suitable for use in construction, and as a result caused large cracks to form in completed buildings. Several main contractors who were affected by these defective products sued the manufacturer for negligent manufacturing, which resulted in them suffering property damage and financial losses.
CGL Insurance would cover the lawsuits alleging defective concrete products. It would pay for lawyer’s fees to defend the concrete manufacturer, and damages if the manufacturer is found liable for the injuries and property damage.
Claim Example 2: Manufacturer of battery cells in PMDs sued
A manufacturer of battery cells supplied their products to a wide variety of other manufacturers. One of these end customers was involved in making PMDs. Due to manufacturing defects, some of these PMD battery cells failed, and caught fire. Several people were seriously injured by such PMD fires. Their homes were also severely damaged by the fires. The injured persons file a lawsuit against the battery cell manufacturer, claiming that the batteries were poorly made, which resulted in them catching fire and injuring others.
CGL Insurance would cover the lawsuits alleging defective batteries. It would pay for lawyer’s fees to defend the battery manufacturer, and damages if the manufacturer is found liable for the injuries and property damage.
Claim Example 3: Wholesaler of food products sued
A wholesaler of food products was alleged to have sold vegetables tainted with dangerous chemicals. A group of affected consumers file a lawsuit against the wholesaler. They claim damages for personal injury.
CGL Insurance would cover the lawsuits alleging that the food was tainted and caused injury to consumers. It would pay for lawyer’s fees to defend the wholesaler, and damages if the wholesaler is found liable for the injuries and property damage.
How much Commercial General Liability coverage do I need?
If your revenue is less than $5,000,000 a year, you should look at coverage amounts between $1,000,000 to $2,000,000. This will usually be more than sufficient to cover lawyer fees and court-awarded damages.
If your revenue is more than $5,000,000 a year, or you operate in industries with extensive third-party legal liability (e.g. high foot-traffic shops, multiple chain stores, a large amount of work conducted in public), you should consider $3,000,000 and more in coverage.
How much does Commercial General Liability Insurance cost?
Commercial General Liability Insurance starts from $89/month onwards. For a precise quote, reach out to us and we’ll assist you ASAP.
With Provide, you save up to 25% on your premiums. Our digital operating model creates lower overheads, and we pass every dollar saved back to our clients.