Commercial General Liability Insurance

Bodily Injury and Property Damage Liability

This is the biggest piece of your CGL policy. Bodily injury coverage pays for medical expenses, lost wages, and legal defense costs when someone is physically hurt because of your business. Property damage coverage kicks in when your operations damage someone else's belongings or property.

Think of a plumber who accidentally floods a client's kitchen during a repair. The CGL policy covers the cost to repair the water damage. Or a retail shop in Rock Hill where a display shelf collapses on a customer: the policy covers their medical bills and any resulting lawsuit. Recovery timelines for injuries are getting longer even as injury rates decline, which means claim costs keep climbing even when fewer incidents occur.

Personal and Advertising Injury Coverage

This part of CGL protects against non-physical harm. Personal injury here doesn't mean a broken bone: it means things like defamation, slander, libel, false arrest, or invasion of privacy. Advertising injury covers claims that your marketing materials infringed on someone's copyright or stole their advertising idea.

A real example: a South Carolina landscaping company copies a competitor's website text almost word-for-word. The competitor sues for copyright infringement. The landscaping company's CGL policy would cover the legal defense and any settlement, assuming the policy doesn't have a specific exclusion for known violations. These claims are less common than bodily injury, but they can be expensive when they hit.

Medical Payments for Immediate Injuries

Med pay coverage (often called Coverage C) is a smaller, no-fault provision. It pays for minor medical expenses when someone is injured on your premises or because of your operations, regardless of who's at fault. Typical limits run between $5,000 and $10,000 per person.

The beauty of med pay is speed. It settles small claims quickly before they escalate into lawsuits. If a customer cuts their hand on a broken door handle at your shop, med pay covers the ER visit without anyone needing to prove negligence. It's a goodwill tool as much as a financial one.

Comparison Table: Liability Insurance Types

Occurrence vs. Aggregate Limits

Every CGL policy has two key limits. The per-occurrence limit is the most your insurer pays for a single incident. The general aggregate limit is the total they'll pay during the entire policy period, usually one year.

A standard policy might read "$1 million per occurrence / $2 million aggregate." That means any single claim maxes out at $1 million, and the total of all claims in a year can't exceed $2 million. If you run through your aggregate mid-year, you're essentially uninsured for the remainder of the policy term unless you purchase an aggregate extension. For businesses with higher foot traffic, like restaurants or retail stores, burning through an aggregate limit is a real risk, not just a theoretical one.

Factors That Influence Your Premium Costs

Your premium isn't pulled from thin air. Insurers calculate it based on several concrete factors:

• Industry and classification code: a roofing contractor pays far more than a bookkeeper
• Annual revenue and payroll size
• Claims history over the past three to five years
• Location: coastal South Carolina businesses face higher premiums due to hurricane and wind/hail exposure
• Square footage of your premises

The commercial property-casualty market has shifted toward softer pricing in 2026, which means some businesses are seeing modest rate decreases. That said, an independent agency like CSP Insurance Services can compare quotes from multiple carriers to find the best rate for your specific risk profile, something a single-carrier agent simply can't do.

Immediate Steps After an Incident

Working with Your Insurance Adjuster

Once you file a claim, your carrier assigns an adjuster to investigate. Their job is to determine what happened, whether the claim falls within your policy, and how much the insurer should pay. Cooperate fully, but know your rights.

Provide all requested documentation promptly. Keep copies of everything you submit. If the claim involves a lawsuit, your insurer will typically appoint a defense attorney on your behalf: that legal defense is included in your CGL coverage and doesn't count against your policy limits in most standard forms. The rising cost of litigation, with industry leaders pushing for urgent legal reform to address ballooning defense costs, makes it even more important to have solid coverage backing you up.

FAQ: Do I need insurance if I work from home?

Yes, if clients visit your home office or you handle their property. Your homeowners policy almost certainly excludes business-related claims. Even a freelance graphic designer in Florence who meets clients at home should carry a basic CGL policy.

FAQ: What does 'additional insured' mean?

An additional insured is a person or organization you add to your policy so they're protected by your coverage for a specific project or contract. Landlords and general contractors commonly require this. It doesn't cost much: usually $25 to $75 per endorsement.

FAQ: Does this cover my employees' injuries?

No. Employee injuries fall under workers' compensation insurance, which is a separate policy and a legal requirement in South Carolina for businesses with four or more employees. CGL only covers third parties.

FAQ: How much coverage is enough for a small business?

Most small businesses start with $1 million per occurrence and $2 million aggregate. But the right amount depends on your industry, revenue, and risk exposure. A contractor faces very different risks than a consulting firm. The NAIC's 2026 strategic priorities emphasize modernizing how coverage adequacy is assessed, and working with an experienced agent helps ensure you're not among the 77% of businesses carrying too little protection.

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