Even in the most meticulously run businesses, accidents—and subsequent lawsuits—can still happen. Commercial general liability (CGL) insurance, also known as general liability insurance, offers businesses a layer of protection against these risks.
Below, we’ll review the ins and outs of CGL insurance, including coverage, costs, and key policy considerations.
What CGL insurance does and does not cover
CGL insurance is a basic type of business insurance that most companies should have. It protects businesses against accidental or unintentional damages that can occur in everyday business operations.
“CGL insurance is basically a financial firewall,” explained Jared Navarre, Founder of Keyni Consulting. “It protects against the unpredictable—and for small businesses, unpredictability is often the most dangerous risk.”
CGL policies typically cover the following:
- Bodily injury and property damage. CGL insurance protects you from claims involving bodily injury or property damage incurred by a third party (i.e., a client, visitor, or bystander in the area) who is not associated or affiliated with you or your company.
- Personal and advertising injury. CGL insurance also safeguards against personal injury (i.e., slander, libel, copyright infringement, wrongful eviction, and advertising infringement) and advertising injury (such as losses and reputation damage suffered by a competitor that you criticize in an advertisement).
- Attorney fees. CGL policies typically provide coverage for defense costs and attorney fees related to the above damages.
Keep in mind that CGL insurance doesn’t cover intentional or expected damages. Here are some common situations not covered by CGL, and which additional business insurance policies can cover them:
- Injuries sustained while on the job (workers’ compensation).
- Vehicle accidents (commercial auto insurance).
- Damage to, or theft of, your own property (commercial property insurance).
- Employment issues, such as harassment and discrimination (employment practices liability insurance).
- Professional errors and/or negligence (professional liability insurance).
- Lost or compromised data due to a cyberattack (cyber insurance).
If having separate policies for each of these feels overwhelming, Zoriy Birenboym, Founder and CEO of eAutoLease, suggests getting an umbrella policy, which can provide an extra layer of protection against loopholes, lawsuits, or damages.
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Why CGL insurance matters
CGL insurance provides your business with critical protection against unexpected claims and subsequent financial loss. Additionally, many industries with client contracts (such as construction or engineering) will require companies to purchase CGL before doing work.
“Not having appropriate general liability coverage exposes your business to catastrophic losses that can potentially end your business,” explained Jesse Zook, Owner of MaidPro Exton. “Sure, your firm may be protected from personal financial losses by virtue of the fact that your incorporation limits liability, but your investment in the business and company assets are still at risk.”
If you’re a startup or small company, you may think you don’t have much to lose and the cost isn’t worth it. However, Zook added, the cost of CGL insurance scales with the size of your business and thus may be inexpensive for an early-stage company.
CGL insurance is basically a financial firewall. It protects against the unpredictable—and for small businesses, unpredictability is often the most dangerous risk.Jared Navarre, Founder of Keyni Consulting
How much does CGL insurance cost?
CGL coverage is more affordable than many business owners assume. According to 2025 data from MoneyGeek, small businesses pay an average of $101 per month ($1,214 annually), though exact numbers will vary significantly based on your business size, industry, and geographic location. For example, a business with a low risk of human incidents (like drone operations) may pay as little as $17 a month. A business in a higher-risk industry (like pressure washing) could pay up to $916 a month.
Your exact quote will also depend on the coverage limits you choose. Julie Jakubek, Owner of an Allstate agency, recommends small businesses opt for at least $1 million in liability coverage, which is the standard in the insurance industry.
“If your sales are over $500,000, then higher coverage amounts should be purchased,” Jakubek said. “If you need more, a separate business umbrella policy will provide extra liability coverage over the main policy.”
While CGL coverage can be purchased alone, it’s often bundled into a business owner’s policy (BOP). A BOP usually includes business personal property, business interruption, and liability coverage in one policy—often at a lower cost than purchasing each separately.
How to compare CGL insurance quotes
While your CGL insurance policy shouldn’t overextend your budget, don’t immediately opt for the policy with the cheapest premiums. The true value of any insurance policy lies in what’s covered, whether you can mitigate for exclusions, and how your provider will support you in the event of a claim.
To help you narrow down your options and fully understand your prospective policy, research the following areas:
- Policy limits and deductibles. When reviewing quotes, consider the aggregate limit (maximum amount of coverage per year) and the per-occurrence limit (maximum amount of coverage per incident). Additionally, compare the cost of the policy versus the deductible you’ll need to meet before you can receive benefits. Higher deductibles often have lower premiums, while lower deductibles have higher premiums.
- Coverage and exclusions. Birenboym advises reviewing the policy in full and asking your representative about any potential exposures. “Make sure your company is protected, and your personal entities are protected,” he said. “That is something you would need to discuss with your CPA and your lawyer.”
- Potential for scaling. Navarre recommends asking how coverage scales as your business grows—can limits be adjusted, or will you need to take out a new policy? There is no “right” answer to this, but you should consider how quickly your business is growing and when (or how often) you’d need to adjust your policy.
Before you make your final decision about an insurance provider, look up reviews and ratings from third-party sites like AM Best (which assesses financial strength) and the Better Business Bureau (which reflects customer feedback). You should also review (or ask your representative about) the claims process and average payout timeline.
As Navarre explained, “a good policy isn’t just about the premium; it’s about how the provider shows up when things actually go wrong.”
Additional reporting by Erik J. Martin. Some source interviews were conducted for a previous version of this article.
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