Commercial General Liability Insurance is a third-party insurance that provides financial support to businesses against any legal liabilities which may arise due to either bodily injury, property damage or personal and advertising injury that may occur as a result of your business activities.
The premium charged for this insurance is a factor of multiple variables including:
- Industry and business type – Businesses with higher exposure for bodily injury or causing property damage to third-parties are at a higher risk. For example manufacturing companies are exposed to more risk than a IT services/consulting company. Construction, Housekeeping and Cleaning companies have higher risk than Manufacturing companies.
- Business and operations size – Larger the number of premises, higher the risk of an injury claim.
- Number of employees
- Limit of liability – Value for which you the insurer to pay if there was a claim
- Any past loss experience in the policy
In general most of the insurance companies use risk classification and rating system built by insurance Services Office (ISO) as standard formula for calculating the premium. The cost of this insurance depends on the following:
- Risk classification assigned to the particular business – Typically industry type and scope of operations are considered for classification.
- Rates – Depending on the coverage type ( premises and product completed coverage) the rates will vary. Companies having both coverages are rated higher.
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