Several disasters can significantly impact your business finances. For example, an employee might accidentally damage merchandise by spilling paint, a customer could get hurt after tripping on a rug in your store, or you might face a lawsuit due to reputational harm caused by something you or your employee said.
General liability insurance provides essential coverage for these situations and more, making it vital for small business owners. Bradford Turner Insurance Group in Cumming, Ga can shop for multiple quotes to ensure you get the best coverage for your needs.
Understanding General Liability Insurance:
General liability insurance is a crucial type of small business insurance that protects your business from accidental injuries, property damage caused to others, as well as concerns like advertising injury, copyright infringement, and reputational harm.
These claims can result from your business’s products, services, or operations. Without general liability insurance, you may have to pay these costs from your business income, possibly leading to bankruptcy in severe cases.
General liability insurance is also identified as “business liability insurance” or “commercial general liability insurance.”
What General Liability Insurance Covers:
General liability insurance covers an array of claims, including bodily injury, property damage, copyright infringement, reputational harm, and advertising injury.
- Bodily injury: Covers medical costs if someone is injured at your business like a customer falling in your store.
- Property damage: Protects your business if you damage someone else’s property, such as a client’s house during a service.
- Copyright infringement: Covers lawsuits if your business uses someone else’s work without their permission.
- Reputational harm: Provides protection if your statements damage another business’s reputation.
These types of claims are common, accenting the importance of having the right insurance. For example, slip and fall claims can cost up to $20,000, while reputational harm lawsuits may result in $50,000 in expenses.
A commercial umbrella insurance policy can provide extra protection against expensive lawsuits, adding another level of security.
What General Liability Insurance Doesn’t Cover:
While general liability insurance protects many aspects, it doesn’t include business-related auto accidents, employee injuries, damage to your business property, professional mistakes, claims exceeding your policy limit, or illegal acts by you or your employees.
For these situations, different types of business insurance are needed:
- Employee injuries and illnesses: Covered by workers’ compensation insurance.
- Auto accidents: Addressed by commercial auto insurance for business-related accidents.
- Professional mistakes: Handled by errors and omissions insurance (E&O) or professional liability insurance.
- Theft and damage to business property: Requires commercial property insurance.
- Intentional acts: Insurance will not cover anything that is deliberate, illegal actions, or wrongdoings.
Who Needs General Liability Insurance:
Business liability insurance is necessary if:
- Your business interacts with the public, clients, or vendors.
- You create marketing materials or advertisements.
- You use social media for personal or professional reasons.
- Business activities take place at third-party locations.
- Work contracts require insurance coverage.
- Temporary employees are included in your workforce.
Businesses That Benefit from General Liability Insurance:
Businesses like artisan contractors, consultants, janitorial services, marketing firms, and real estate agents, among others, normally invest in general liability insurance.
Is General Liability Insurance Mandatory?
While not legally required, a lack of general liability insurance leaves your business exposed to potentially significant costs and could result in losing clients who insist on businesses having this coverage.
Determining Coverage and Costs:
Most small businesses choose standard coverage amounts of $1 million per occurrence and a $2 million aggregate policy limit for their general liability insurance. The cost averages around $42 per month, although it differs based on business size, industry, location, and coverage needs.
Getting the Right General Liability Insurance:
Before obtaining coverage, gather essential information about your business. Consider a Business Owners Policy (BOP) that includes general liability insurance, commercial property insurance, and business interruption insurance, providing comprehensive protection. Compare quotes from an independent broker to ensure you get the best coverage for your needs.
