There are many calamities that can seriously affect your results. For example, your employee might spill a can of white paint on merchandise. or a customer could be injured after tripping over a rug in your store. or you could be sued for reputational damage because of something you or your employee said.
General liability insurance covers a small business from these types of problems (and more). it is an essential type of coverage for small business owners.
Reading: What is covered under general liability insurance
what is general liability insurance?
General liability insurance protects a business against bodily injury and property damage claims by customers and consumers. These types of claims may result from your company’s products, services or operations. Without general liability insurance, you could end up paying out of your business income and, in the worst case, even file for bankruptcy.
general liability insurance is sometimes called “commercial liability insurance” or “commercial general liability insurance”.
what insurance do I need for my small business?
General liability insurance is a core type of coverage for any small business insurance policy, but it’s only part of the solution to the multitude of problems that could affect your business financially. You’ll want to add more types of coverage to protect your business against other types of risks, such as fire, theft, vandalism, and loss of income.
A good way to start is with a business owner’s policy (bop). bundles general liability insurance along with business property insurance and business interruption insurance (also known as business income insurance).
You can also add other types of business insurance to meet your business needs. For example, if you use a vehicle for work purposes, you can add business auto insurance.
what does general liability insurance cover?
General liability insurance protects a business from a variety of potential claims, including bodily injury, property damage, copyright infringement, reputational damage, and publicity damage.
- bodily injury caused by a business is a common claim. If someone comes to your workplace and is injured, a general liability policy would cover your medical costs. A bodily injury claim could be as simple as a customer falling in a store or office.
- Property damage is another common liability claim. Your business may be legally liable if a person’s property is damaged while they are at your business. Property damage claims can also include damage to a client’s home or other property if you are visiting them on business.
- copyright infringement arise if you are accused of using someone else’s work in your commercial or other commercial marketing without their permission.
- reputational damage can occur, for example, if you are interviewed by a media outlet and say something about another company that hurts your business.
- advertising injuries can occur if your business defames another person, the business owner, or the business.
- employee injuries and illnesses. You need workers’ compensation insurance to provide coverage for employee injuries.
- car accidents. For auto accidents while doing business, a commercial auto insurance policy protects you financially if you own the car. Non-owned or leased auto insurance offers protection if you use a personal car or a rental car for work.
- professional errors. An errors and omissions (e&o) insurance policy provides coverage if you make mistakes in the course of your work. An e&o policy is sometimes called professional liability insurance.
- Theft and damage to your company’s property. General liability insurance will not cover your company’s equipment or property against theft or damage. you need a commercial property insurance policy to cover these kinds of problems.
- your business is open to the public or customers or suppliers.
- you advertise or create marketing materials for your company.
- Use social media personally or professionally.
- uses third-party locations for commercial activities.
- needs insurance coverage to be considered for employment contracts.
- has temporary employees.
- small business owners
- landscape companies
- you contractors
- real estate agents
- marketing companies
- concierge services
- craft contractors
- your type of business. If your business is a high-risk business, you pay a higher cost for general liability insurance.
- the years of experience of your business.
- size, location, condition of your building.
- policy details, such as deductibles and coverage limits.
- your company’s insurance claim history.
- basic contact information
- information about what your company does
- number of employees
- details about the location of your business, including whether you own or rent the building where your business is located
- documentation showing how long you have owned your business
- estimated business income for the next year
These types of liability claims are common, so you’ll want to keep your business protected with the right insurance. For example, the average cost of a slip and fall claim is $20,000. And if you face a reputational damages lawsuit, you could face costs of $50,000, according to Hartford.
A good way to expand your commercial liability insurance is to purchase a commercial general insurance policy. this gives you an extra layer of protection against costly lawsuits.
what does general liability insurance not cover?
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general liability insurance covers a lot for a business, but it doesn’t cover everything. will not cover business-related auto accidents, employee injuries and illnesses, damage to your business property, errors in professional services, claims exceeding your policy limit, or illegal acts by you or your employees.
For these types of liability claims, you will need different types of commercial insurance, including:
Insurance does not cover intentional acts, such as throwing a computer out of a window. And general liability insurance won’t help if you or your employees commit deliberate illegal acts or wrongdoing.
who needs general liability insurance?
These are situations where you would benefit from commercial liability insurance coverage:
what types of businesses benefit from general liability insurance?
Types of businesses that typically purchase general liability insurance include:
Does the law require general liability insurance?
Business liability insurance isn’t required by law, but if you don’t purchase coverage, you’re leaving your business vulnerable to a wide variety of costs that could bankrupt you.
How much general liability insurance coverage do I need?
Most small businesses choose standard coverage amounts of $1 million per occurrence and an aggregate policy limit of $2 million for their general liability insurance coverage, according to Insureon. this type of policy will pay up to $1 million to cover a single general liability insurance claim, with a limit of $2 million for all claims during the policy period. the policy period is usually one year.
how much does general liability insurance cost?
general liability insurance costs an average of $42 a month, according to insureon. It could be less than that: 17% of Insureon’s small business customers pay less than $25 a month for their General Liability policies.
The cost of general liability insurance coverage varies depending on the size of the business, its industry, its location, and the amount of coverage it needs.
You can manage general liability insurance costs by choosing the insurance limits that best fit your needs. A business owners policy is a convenient and cost-effective way to combine general liability insurance and commercial property insurance. but you can also purchase general liability insurance on your own.
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How much you pay for general liability insurance depends on key factors like:
the risks of not having general liability insurance
Facing judgments, settlements and attorneys’ fees without the help of general liability insurance can be very costly and even bankrupt your business. legal advice can cost more than $100 per hour. Court costs can exceed $75,000 if the claim goes to court, and you may have to spend several thousand dollars even if the lawsuit is dropped, according to Hartford.
Not having general liability insurance puts your business at financial risk. and you may lose customers because they won’t do business with you if you don’t have general liability insurance.
To prove you have insurance coverage, you will need a certificate of insurance. This official document lists all the types of coverage and the limits of an insurance policy.
how to get the best general liability insurance
Here’s a guide to getting the best general liability insurance.
gather your information and documents
Before you start shopping for a general liability insurance policy, you’ll want to make sure you have all the necessary information on hand. this is what you will need:
consider a business owners policy
A general liability insurance policy is essential coverage for your small business, but it won’t cover issues like theft, vandalism, fire, severe weather, and loss of income. if you want coverage for these types of problems, you’ll need to purchase additional coverage.
A good way to do this is to buy bop, which combines general liability insurance with commercial property insurance and business interruption insurance. It is usually cheaper to buy a bop than to buy all three policies as separate policies.
compare general liability insurance quotes
Whether you purchase general liability insurance as a stand-alone policy or as part of a bop, you’ll want to compare business insurance quotes from several insurance companies. That’s because insurers don’t price their policies the same.
You can get free business insurance quotes online or by talking to an independent insurance agent.
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