Commercial general liability insurance is a form of business insurance that financially protects your company from the damages resulting from an accident that is the fault of you, your equipment, or one of your employees during the course of the performance of the services offered by your company. It is an often overlooked, but vital component of the general insurance coverage for your business.
Let’s assume for the moment that your business runs a service that cleans carpets in people’s homes. During the cleaning process, you routinely use various soaps, shampoos, and equipment in the performance of your job in order to ensure that you leave everything as clean as possible..
Now, let’s assume that in the process of a cleaning, your commercial carpet shampooer breaks down and spews huge amounts of water and cleaning chemicals in all directions. In the process, damage is done to the building you are cleaning. Legally, the customer has the right to sue you for damages and you are entirely liable for the cost of repair.
That is the beauty of liability insurance. If you have good coverage, all you have to pay out of your pocket is the deductible you agreed on when you set up the policy. After that, your insurance carrier will pay the remainder of the damages awarded, as well as any lawyer and court fees that have accumulated as a result of the accident if your customer took you to court over it.
So, it may seem like an extraneous expense because it is not used very often, but in the event that something does, liability insurance will seem like the greatest financial decision you ever made.