How Can General Business Liability Insurance Work for You and Your Business

When starting a business, insurance isn’t the first thing you usually worry about. After all, you’d first want to ensure that you’ll have enough to pay for all operating costs and break even. And of course, you want to recover your investment as quickly as possible.

However, if you can spare the cash for it, it’s important to get insured. Why? It’s because general business liability insurance—or, to use its official name, Commercial General Liability (CGL) insurance—can safeguard your business against loss.

Removing Liability

General business liability insurance guards business owners from loss by protecting them from liability claims. According to the Texas Department of Insurance website, a CGL policy usually covers the following: 

• Bodily injury
• Property damage
• Personal and advertising injury (otherwise known for slander and false advertising) 

But which kind of policy should you choose? There are two popular options:

• Occurrence policies
• Claims-made policies, which are further subdivided into two:
• Prior acts or “nose” coverage
• Run-off or “tail” coverage

The biggest difference between those two categories is the duration of their effectivity. Let’s say that you bought a policy effective from May 1, 2015 to April 30, 2016. Then a customer gets into an accident in your store on January 15, 2016 but only manages to file a claim on June 1, 2016.

Under an occurrence policy, this claim is accepted because the incident falls under the policy period. However, it won’t be honored under a claims-made policy, because it was filed after the policy period ended.

Insurance Exclusions

However, while general business liability insurance covers a number of cases, there are still exclusions. These are the following:

• Damage to Your Work – insurance won’t pay property damage as a result of your own work or as a result of a subcontractor’s work for you
• Damage to Your Product – insurance won’t pay for property damage to your product, if that product caused the property damage itself
• Contractual Liability – if you signed a contract that requires you to pay for bodily injury or property damage
• Pollution – if pollution is created from your business operations, any injury or damage to a third party caused by that pollution is not covered
• Workers’ Compensation and Employer’s Liability

By default, the recall of products, work, or impaired property are also excluded from basic CGL policies. However, some insurance companies offer to add this coverage for a premium charge.

To get the right general business liability or CGL insurance for your business, go to Quote Texas Insurance. Established in 2001, our company uses a custom 8 step process to help our customers get the right policy from our vast network of insurance providers. Using the latest technology, we have gradually expanded across the state of Texas, now serving over 10,000 businesses. To get a quote, simply call us at 844-402-4464 from Mondays to Fridays, 8 am to 5 pm.