If you run a business, you’ve probably heard the term “commercial general liability insurance” tossed around — sometimes shortened to CGL insurance or simply general liability insurance. But what is commercial general liability insurance, what does it actually cover, and do you really need it?
In short, commercial general liability insurance protects your business from third-party claims involving bodily injury, property damage, and personal or advertising injury. These are the kinds of everyday risks that can crop up when customers, clients, vendors, or visitors interact with your business. Each is further explained below.
And just to clear up a common point of confusion: commercial general liability insurance and general liability insurance are the same thing. The word “commercial” simply emphasizes that the policy applies to commercial spaces or businesses.
Let’s break down what commercial general liability insurance covers, what it doesn’t, who needs it, and how to decide if it’s right for your business.
At its core, commercial general liability insurance is designed to protect your business from claims made by third parties, not you or your employees. This means if someone (like a customer or a visitor) from outside your company alleges that your business caused them harm, CGL insurance can help cover legal defense, settlements, and court judgments.
Most policies include these five key areas of protection.
Bodily injury coverage helps protect your business if a third party is physically injured because of your business operations. For example:
If that person sues your business or demands payment for medical bills, your commercial general liability insurance can help cover legal fees and damages.
Property damage coverage kicks in if someone from your business accidentally damages someone else’s property.
Imagine scenarios like:
Commercial general liability insurance can help pay for repairs or replacement and any related legal costs and settlements.
This part of a CGL insurance policy is often misunderstood, but it provides important protection for you and your business. Personal and advertising injury coverage protects your business against claims, typically from other brands and competitors, related to:
If a competitor claims your marketing caused them reputational harm, this coverage can help pay for legal defense and settlements.
One of the biggest benefits of commercial general liability insurance is that it typically covers legal defense costs, even if the claim against you is groundless. That includes:
Since claims can go back and forth with opposing legal teams for months (or years), legal expenses alone can be financially devastating. This is why commercial general liability insurance is typically seen as essential for small businesses.
If your business manufactures, sells, or installs products — or performs work that continues after the job is done — products-completed operations coverage is critical. It can help protect you if:
This protection typically applies once the product is off your premises or the work is finished.
While commercial general liability insurance is broad, it doesn’t cover everything. Understanding its exclusions helps you avoid potentially dangerous coverage gaps.
Commercial general liability insurance does not cover claims related to:
Those risks are covered by professional liability insurance, also known as errors and omissions (E&O) insurance.
While it can help pay to repair or replace other people’s damaged property, CGL insurance does not cover damage to:
That type of protection usually requires business personal property (BPP) insurance, which covers your business assets, or commercial property insurance, which covers the building as a whole. If you rent your office space and still want to insure your equipment and inventory, BPP can usually be added to your CGL policy.
If an employee gets hurt on the job, commercial general liability insurance won’t cover it.
Employee injuries are handled through workers’ compensation insurance, which is legally required in most states for businesses with employees.
If one of your business vehicles causes an accident, CGL insurance doesn’t apply. You’ll need commercial auto insurance to cover injuries, property damage, and liability related to business-owned vehicles.
Technically, commercial general liability insurance isn’t required by law in most states. Practically speaking, though, CGL insurance is often required to do business. Many clients, vendors, landlords, and partners will ask for proof of coverage before:
If your business:
then commercial general liability insurance is likely essential. Even home-based or solo businesses can face claims that put personal assets at risk without proper coverage.
For many small businesses, commercial general liability insurance is more affordable than you might expect — especially compared to potentially huge costs of a lawsuit.
Berxi commercial general liability insurance policies start at around $100 per year for certain solo professionals, like personal trainers, and $350 per year for small businesses.
The best way to find out how much your CGL insurance policy might cost is to get a quick online quote.
Several variables influence how much you’ll pay for commercial general liability insurance.
Commercial general liability insurance is a strong foundation — but it’s rarely the only coverage a business needs. Here are some of the other insurance policies small business owners and consultants explore.
Professional liability insurance, also called errors and omissions insurance, covers claims related to professional services, such as negligence, errors, or failure to perform.
If you provide advice, consulting, healthcare, or specialized services, you’ll likely need both CGL insurance and professional liability insurance for full protection. You can also buy an E&O policy at Berxi.
Business personal property (BPP) insurance protects the physical items your business owns and uses every day — whether you work in an office, rented space, home, or job site. This typically includes:
If these business assets are stolen, damaged, or destroyed due to a covered event, BPP insurance can help pay to repair or replace them. This can be added to your CGL policy during the online quote flow or over the phone.
Workers’ compensation covers employee injuries and illnesses related to work. It is legally required in most states for businesses with employees and works alongside — not instead of — CGL insurance coverage. For Berxi customers, workers’ comp insurance can be added as a separate policy through a partner (call 833-24-BERXI to learn more).
A business owner’s policy (BOP) bundles:
BOPs are often best suited for businesses that own their office or building rather than lease it. Bundling insurance can sometimes simplify coverage and reduce overall costs.
Cyber liability insurance helps cover expenses related to:
Any business that stores customer data, processes online payments, or relies on digital systems should strongly consider cyber coverage. Berxi GL customers can get cyber liability insurance as a separate policy through a partner insurance company (call 833-24-BERXI to learn more).
Commercial general liability insurance isn’t just about compliance: it’s about protecting the business you’ve worked hard to build. With the right coverage in place, you can:
Having great CGL insurance helps you focus on running day-to-day operations without legal distractions. Berxi offers comprehensive, affordable general liability insurance that gives you peace of mind to focus on what matters: growing your business.
Get a quote today and protect the business you’ve worked so hard to build.
Yes. The terms are interchangeable. “Commercial” simply emphasizes business use.
CGL insurance covers third-party bodily injury, property damage, and personal and advertising injury. This means if a customer or a visitor from outside your company alleges that your business caused them harm, CGL insurance can help cover legal defense, settlements, and court judgments.
Professional liability covers mistakes or negligence in your professional services that allegedly cause harm to a client or patient. You might also hear professional liability insurance called errors and omissions (E&O) or medical malpractice insurance.
No. Employee injuries are covered by workers’ compensation insurance. However, a Berxi teammate can help CGL customers buy a workers’ compensation policy through a partner. Call 833-24-BERXI to learn more.
In some cases, yes. However, requirements vary by insurer and state. Luckily, Berxi has a handy guide to help you figure out whether you can get commercial general liability insurance without a business license.
In many states, commercial general liability insurance isn’t required by law. Practically speaking, though, CGL insurance is often required to do business. Many clients, vendors, landlords, and partners will ask for proof of coverage before:
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