What you need to know about general liability insurance
Running a business is an exciting adventure filled with a million decisions. No two entrepreneurs have the same journey, and no two businesses have the same strategies. However, one element that every company should consider is the insurance they use to protect the organization.
While more specialized coverages such as cyber risk insurance and errors & omissions apply to certain industries, there are other plans like general liability insurance that every business can benefit from.
The following sections will provide an overview of the importance of general liability insurance and offer insight into which small businesses can benefit from the coverage.
What is general liability insurance?
General liability insurance is often seen as the minimum level of insurance that all businesses should carry. With this coverage, business owners have a protective barrier when a lawsuit is brought against the company. With general liability coverage, medical expenses, attorney fees, court fees, and settlement money are covered.
The policy also covers the following items:
- Property damage
- Bodily injuries
- Advertising/personal injuries
One of the main coverages of general liability insurance is property damage. Although the policy won’t cover you in every instance, there are several scenarios where costs associated with property damage are covered.
For instance, damages a customer or client receives on your business property are typically covered. So, your policy could cover the expenses if you currently own a hardware store and one of your employees damages a vehicle while loading material. The insurance will also cover damages at a client or customer’s home.
Bodily injury claims are often one of the most common lawsuits against a business. These situations occur when a customer is visiting your place of business and is injured. Since bodily injuries can range from a person slipping and falling to an item falling off a shelf and hitting the customer, it’s important to have the appropriate coverage.
Both examples listed above would typically be covered by the company’s general liability insurance policy.
Generally, advertising injuries aren’t a result of malicious intent. Instead, these lawsuits often arise when a business releases marketing materials that paint another company or person in a negative light or make false claims against an organization or individual. In either case, the general liability coverage will help pay for the legal costs associated with the advertising injury.
Who needs general liability insurance?
With how many components of coverage general liability insurance offers, every business, regardless of industry, should strongly consider purchasing a policy. Not only does it provide an additional layer of protection for your customers, but it also helps reassure your employees that you have their back should anything happen.
There are also some industries, such as construction, where clients will require your business to have minimum coverage, including a general liability insurance policy.
The importance of general liability insurance
Many assume that the most important steps to running a successful business are setting up marketing or creating operational processes. While both components are crucial for success, having the proper small business insurance will ensure that your organization can weather any storm it faces.
General liability insurance is great for starting your insurance product lineup. It will provide your company with many of the most important coverages your business will need to keep customers and employees safe.
Thanks for reading! Please note that this content is intended for educational purposes only. As best practices change regularly, you should refer to your trusted advisor for specific counsel. If you’re a small business owner, learn more about workplace safety or check your workers’ comp rate in 3 minutes.