You can never know what kind of calamity will befall your business or how it will hurt your budget. For example, a customer may get injured in your store. An employee could seriously damage your merchandise unintentionally. It can even get complicated legally – you can be sued for defamation and defamation because of something your employee said!
Although you cannot anticipate these things – or prevent them, you can find a way to protect your business and your budget against many of them. The answer lies in general liability insurance. This is a very useful type of insurance, especially for a small business owner.
What is General Liability Insurance?
General liability insurance will protect your business against property damage and bodily injury claims from your customers and employees. Without it, incidents like the ones mentioned above can significantly reduce your company’s budget. There are cases of businesses going bankrupt due to things like a personal injury claim, when everything could have been resolved with the proper insurance.
Your insurance coverage will depend on which one you choose. Generally speaking, this type of insurance covers the expenses of businesses when faced with claims for bodily injury, property damage, and medical expenses resulting from their activities.
How to Get the Best Professional Liability Insurance
Getting quality insurance these days is very simple. You need to choose the right company and provide some details about your company, as well as complete the payment.
If you are looking for quality professional liability insurance, CoverWallet is a great option for you. You can get a quote directly from their website or speak to agents to discuss the details.
If you want to speed this up, start gathering the documentation. Make sure you have all the information you need to save time. In most cases, you will need at least the following items:
- Basic Contact information
- General information about your business operations
- Details such as your places of business
- Number of employees
- Documentation that shows how long have you had the business
- Estimated revenue for the following year
What does general liability insurance cover?
This will of course depend on where you get yours. Good quality insurance will most likely cover the following:
- Third party bodily injury
It is an injury that occurs to people outside your business, but is related to your business activities. For example, the customer slips or something falls on him in your store. They need medical assistance and will sue you for the injury. Part of the liability insurance coverage is health insuranceto cover these expenses.
Property damage is a common liability action. When your business is held legally liable because someone’s property has been damaged by your business, that is property damage. For example, you can perform work on a customer’s product or at their home. You can even just be visiting, but if you cause damage, your company is liable. Liability insurance will cover repair costs.
These days, many companies rent out space. If someone in your company damages the accommodation you are renting, you are responsible for replacing it. Let’s say an employee accidentally breaks a window. Liability insurance will cover the replacement cost.
- Claims of copyright infringement
If you are accused of using someone else’s work in your commercial advertisements or other marketing strategies without their permission, they can sue you for copyright infringement. This also falls under general liability insurance.
In the event that your products harm a developer in some way, the insurance will cover the legal costs when they sue you. For example, a customer may use your product and develop allergies or other health issues.
If your business or the people who work there defame another person, business, or business owner, you can be sued for libel or slander. General liability covers the legal defense in such cases.
Of course, there are terms and conditions that come with each insurance company’s coverage. You should check with the insurer if you are eligible for coverage, full or partial. If you are looking to get more coverage, you may want to extend the insurance and purchase a commercial umbrella insurance policy.
A reputational damage lawsuit costs $50,000. A slip and fall claim can cost around $20,000. Chances are some general liability insurance will only cover part of this. Getting more or larger insurance can give you more coverage.
Do I need general liability insurance?
Every small business can benefit from this type of insurance. Here is a list of situations where you will certainly benefit from it:
- You advertise marketing material for the business / use social media (risk of publicity harm)
- Your business is open to customers, suppliers or the public (third party injury risk and product liability)
- You rent spaces for your professional activities (rental liability)
- You need coverage to be eligible for certain employment contracts and projects
Will liability insurance be enough for me?
It all starts with general liability insurance. This is the basic, basic type of coverage that you should definitely consider for your small business policy. If you want coverage for more issues that may have a financial impact on your business, you can certainly opt for additional insurance options.
For example, general liability insurance does not cover risks such as vandalism, theft, fire or loss of income. To cover this, you can invest in a Business Owners Policy or BOP, which combines general liability insurance, commercial property insurance and business interruption insurance.
This combo is much more expensive, but it covers more risk. You can also add other types of insurance depending on your business needs and of course your budget.
For example, if your business uses vehicles for transportation or just to get around, commercial auto insurance could be a great investment.
Risks not covered by general liability insurance
To give you a better idea of what you might need in addition to what is covered by general liability insurance, let’s take a look at what this type does not cover. You will also learn what type of insurance you need to cover these risks.
- Illness/injury of an employee – workers compensation insurance
- Professional errors in the course of work – errors and omissions insurance (E&O)
- Road accidents – commercial auto insurance
- Theft and damage to company property – commercial property insurance
Keep in mind that none of the insurance you purchase, no matter how small or expensive, will cover intentional acts and damages. If you throw your desk out the window and the insurance can prove it, you won’t be compensated for the damage.
There are also limitations and exceptions to what is covered by each insurance. For example, while general liability insurance covers property damage, in circumstances like a fire department damaging your office, you can claim compensation from insurance, but they may partially cover it or refer you to the fire department if it’s not covered under their coverage.
How much will general liability insurance cost me?
The cost of your insurance will depend on the size of your business and its risks, as well as the insurer. This is popular insurance with small businesses because it usually costs very little. If your business is very small, a general liability insurance policy may cost less than $50 per month.
Of course, the cost will increase if your business is bigger or grows over time. It also varies depending on the industry you work in. If your industry has more risk and more liability, the price will be higher.
Finally, it will depend on the amount of coverage you need. Keep in mind that if you limit your coverage amount, the insurance will only partially pay for large expenses based on what you agreed to.
Let’s review the elements that affect the price of insurance:
- Kind of trade. High risk companies pay a higher cost of insurance.
- Number of years of experience and size of company.
- Location of your business.
- Condition of your building or office.
- Insurance claims history for your business.
- Policy details. This includes the amount of excess, deductibles, etc.
The last question is: Can you afford NOT to have it?
As a business owner, you face endless legal fees, legal settlements, judgments and liabilities. Without the help of an insurance company, it can destroy your business in an instant. What you’ve worked so hard for may simply be gone because a client slipped on your office floor or a newly hired employee shared confidential information with a third party.
General liability insurance is the basic coverage that every business needs. The costs for small businesses are very low, so let’s face it, you can’t really afford not to have this.