If you own a business, then you know that the cost of running a business can be high. Running a business involves risk, and so does operating your business. A riskier business means that you need more coverage to protect your assets and provide security in case something bad happens. A general liability insurance protects your company from lawsuits and financial losses due to injuries or damage caused by the company’s employees, customers, vendors, contractors, suppliers, or others who use the company’s assets. In this article, you will learn about what commercial general liability insurance is as well as why it’s important for businesses of any size.
Why Is CGL Insurance Important?
When you are operating a business, there are certain risks involved. When you own a restaurant, for example, there is a higher risk that someone will get hurt on one of the restaurant’s tables. This is because restaurants are often in high-traffic areas where something bad could happen. Having a general liability insurance protects your company from lawsuits and financial losses due to injuries or damage caused by any of your company’s assets. Assets could include anything like equipment, inventory, buildings, vehicles, and so on. You need this type of insurance if you own a business because risks are higher for businesses. Beyond that, the reason that you need commercial general liability coverage is because it protects you in the event that someone is injured on the company’s property or someone makes a claim against the company based on injuries on the company’s property.
Requirements for Standard CGL Coverage
To have the standard form of commercial general liability insurance a business typically needs to have a net worth of more than $1 million and it has to be in operation for more than 12 months. It’s common for a business to increase the minimum net worth amount if it is a start-up, but the minimum amount is usually $5 million or higher. If the business is in operation for less than 12 months, then it still needs standard CGL coverage. If a business is a new venture, then it almost always needs standard CGL insurance coverage.
When Should You Have CGL Insurance?
CGL insurance is important for several reasons. First, it protects your company from lawsuits and financial losses due to injuries or damage caused by any of your company’s assets. Assets could include anything like equipment, inventory, buildings, vehicles, and so on. You need this type of insurance if you own a business because risks are higher for businesses. Beyond that, the reason that you need commercial general liability coverage is because it protects you in the event that someone is injured on the company’s property or someone makes a claim against the company based on injuries on the company’s property. Since CGL policies are a must-have type of coverage, it’s important to understand when you need it and how much coverage you need. You can’t skimp on this coverage.
CGL insurance can be expensive and difficult to obtain. That’s why so many business owners overlook the need for it and fail to protect themselves in the event of a lawsuit. You can greatly reduce your risk of being sued and losing money in a lawsuit if you have the right amount of CGL coverage. Only you can decide if this coverage is worth the expense.
