Big or small, your company needs to be insured. Whether you’re in the business of construction or making jewelry, you should consider buying commercial general liability insurance (“CGL”). The typical CGL policy will cover your business for certain specific losses. Specifically, in the event you or the company are sued for “bodily injury,” “property damage,” “personal injury” or “advertising injury,” the typical CGL policy will provide coverage, including providing you with a defense if a lawsuit is filed. The value of a defense is no small benefit – lawsuits cost an enormous amount of money to defend. If a giant company sues you, even if from your standpoint the lawsuit has little merit, the giant company could quickly put your company out of business simply by the amount of money you’ll have to expend in defense of the lawsuit. Thus, the insurer’s duty to defend under the CGL policy is of great value.
CGL policies cover “bodily injury” or “property damage” caused by an “occurrence,” defined as an accident. These coverages are occurrence based, which means that there is only coverage if there is a covered occurrence. Thus, they cover accidental injury to the body or to property caused by your company’s conduct. For example, if someone is injured on a construction site, usually every contractor and subcontractor is sued. Even if your company is only responsible for the plumbing or landscaping on the site, your company may be sued. You would want coverage for that.
Commercial general liability insurance policies also cover “personal injury” and “advertising injury,” sometimes combined as “personal and advertising injury” or “personal injury and advertising injury.” These coverages are offense based, which means that there is coverage only if there is a covered offense. Thus, they cover certain listed offenses, such as if your company is sued for things like defamation, copyright infringement, trespass, or invasion of privacy. For example, if a competitor sues you for libel or slander because your company claims to have a superior product, you would want insurance coverage for that.
Big or small, your company is worth a lot to you. Don’t be unprepared or unprotected when something goes wrong. Even one lawsuit could create financial difficulties and possibly threaten your business. Commercial General Liability Insurance is an important protection that you will be glad you have.