What does a general liability insurance policy cover?
If you make a mistake that causes a customer or other non-employee a loss, then they might demand compensation from the business. General liability insurance is the coverage you can use to help you do so. A claim on your policy might cover costs of third-party:
· Bodily Injuries
· Property Damage
· Personal Injuries (Libel, Slander, Copyright Infringement)
· Accidental Medical Payments (cover third party injuries regardless of fault)
· Legal expenses sustained in a lawsuit
Policies can cover negligent actions by both employees and the business owner. However, any harm caused because of intentional or criminal actions will have no coverage.
Why is general liability insurance important?
General liability policies exist because to be liable for something means that you are responsible for it. Therefore, liabilities in businesses include the responsibility you have for others’ security. If you cause someone a problem, then you will likely have to pay them to pick up the pieces. Liability insurance can provide the money to help you do so. That way, you won’t strain the business’s finances.
How much general liability insurance do I need?
You want to minimize the financial ramifications of any liability lawsuit. So, when choosing your coverage limits, you’ll want to consider the size of the business, the number of employees, the costs of common industry claims and other factors. Many policies offer at least $1 million in coverage.
Keep in mind, besides your standard general liability coverage, you might need other policies like errors & omissions (E&O), cyber liability, directors & officers (D&O) or employment practices coverage.
When is general liability insurance required?
Certain regulated industries must carry general liability policies. Additionally, contractors are often required by clients to buy coverage before they can bid for a project. If you rent your business space, then your landlord might require you to buy coverage, too.
Will my liability policy always cover me?
Liability policies usually fall into two categories:
· Occurrence Policies: Your liability policy will have an expiration date. However, occurrence policies will offer coverage even after the expiration date. If the accident occurred while that policy was in effect, then the old policy can cover a claim that arises after it expires.
· Claims-Made Policies: On claims-made policies, both the accident in question and the claim must occur during the time between the policy’s start and end dates. Claims occurring after the end date of the policy will not have coverage unless you buy a tail endorsement to extend your coverage.
How much does general liability insurance cost for a small business?
The cost of your general liability policy will vary based on numerous risk factors such as:
· The size of your business and your payroll
· Industry risks present in your operations
· The coverage limits you choose
If you choose to buy your general liability policy as part of a business owners policy (a BOP), you’ll often receive more favorable rates as opposed to buying separate CGL coverage.
However, your agent is happy to work with you in all cases to find the appropriate policy for both your coverage needs and your budget. Our unique policy comparison tools can help us look through multiple policies from multiple insurers to find one that offers you optimized coverage.