Commercial General Liability (CGL) insurance is purchased to protect against liability claims for bodily injury and property damage arising out of events occurring on the business’ premises, from its operations (whether services or products) and personal injury liability. If a company is sued, the liability insurance will pay for damages, other awards and often expenses. This saves the company from paying out huge cash settlements or damages and often is critical in keeping a firm from going bankrupt. While many companies may never need to use the funds provided by CGL insurance, this product is a must-have for any law firm—large or small. It limits risk for the firm, its owners, managers, and employees.
You may think, well I am small so I need to keep my costs down. But if there is an accident or other liability causing incident, many small businesses end up going out of business because they cannot cover the costs involved. It is wise when setting up any business to list scenarios when CGL insurance might be needed. Liability insurance can cover some or all of the loss and costs of defense if you are sued. Paying a monthly insurance premium buys the right to transfer the impact to the insurance company. Without this coverage you could lose all your financial assets, your home and a successful future in your chosen profession.
The amount of insurance you choose is based on three things: the likelihood of the risk becoming a loss event, the impact of the event on the health of your practice and your budget.
There are four major components to a CGL policy.
1.Damage to property
2.Physical or bodily injury
3.Injury related to advertising
4.Slander/libel or personal injury
When choosing your policy for CGL coverage, be sure to determine the appropriate policy limits for you. Depending upon the state you live in, there may be legislated minimum amounts of coverage you must carry. Equally important is the maximum amount of coverage you need to adequately protect yourself. Be sure to speak to a licensed, reputable general agent who will be qualified to help you assess your specific need. As in most insurance coverage decisions, the amount of the deductible you are willing to carry will have a great impact on the cost and amount of coverage you can afford.