As a small business owner, unexpected events can put you at financial risk. For example, a customer could trip over equipment and fall at your business or an employee may accidentally damage a client’s property.
General liability insurance can help cover costs related to these incidents. Learn more about this coverage to determine whether it might be a good fit for your company. Check out Leading Insurance Outsourcing Company for more information.
Coverage A
On a daily basis, customers, vendors, suppliers and others interact with your business. Some of these individuals may claim that your work has caused bodily injury or property damage. These claims can lead to costly lawsuits. General liability insurance helps protect your business from the costs of such claims.
Some of the most common coverages in a commercial general liability policy include premises liability, which offers protection for injuries that occur on your business’s property. Product liability, which covers damages resulting from the manufacture, distribution or sale of your company’s products. And personal and advertising injury, which pays for expenses when your company’s words or actions cause a libel or slander lawsuit, copyright infringement in an advertisement or wrongful eviction.
Typically, the standard business general liability policy includes $1 million per occurrence and $2 million aggregate policy limits. You can buy an umbrella policy to increase these limits, which can also help reduce your premium.
Coverage B
Other structures coverage, which is often included within a standard homeowners policy, covers anything on your property that isn’t attached to your house and doesn’t fall into one of the other categories (like fences, sheds and detached garages). For example, if high winds from a hurricane knock over these types of fixtures, other structures coverage would pay to repair or replace them.
This type of insurance typically includes up to 10% of your dwelling coverage for structures like these. However, it doesn’t protect the items stored inside of these structures, such as a lawnmower or tools.
Business owners should also consider a business owner’s policy (BOP) that combines general liability and commercial property insurance into a package. This is usually less expensive than purchasing each policy separately. This type of policy can provide protection against the loss of expensive equipment, inventory and other assets that might be lost in a disaster or other catastrophe. It can also help protect your company’s financial future from lawsuits that claim your work caused physical injury or damaged property.
Coverage C
The average cost to defend a lawsuit against your business is $75,000, so having general liability insurance coverage can help protect you financially. It’s important for small businesses because it helps pay for property damage and bodily injury. Some clients, agencies and employers require that you carry a certain level of general liability insurance before they will work with you.
General liability policies typically include product and completed operations liability coverages to help pay for the legal costs associated with a claim that your company’s products or services caused harm. This includes physical injury like a customer getting sick from undercooked food and non-physical injuries that are made by written or verbal communications such as libel, slander or copyright infringement.
In addition, some general liability policies have personal property coverage. Often referred to as Coverage C, this part of the policy offers protection for equipment and inventory not permanently fixed to your building or on the ground. It may also help pay for financial losses if your gear is stolen or destroyed.
Coverage D
General liability insurance provides a financial safety net if you get sued over a customer injury, damage to someone else’s property or an advertising injury like libel or slander. It also helps pay for the legal costs of defending your business.
Some businesses need more coverage than others. For example, artisan contractors may be required to carry general liability insurance to qualify for professional licenses or work on certain projects. Food and retail businesses typically need to include liquor liability and workers’ compensation coverage in their policy, too.
A property portion of general liability insurance, sometimes called Coverage D, can help if your business suffers from a covered loss that makes your building or equipment unusable. It typically covers things like rent for a temporary space, daily meals while you’re without a kitchen, storage expenses and extra commuting costs. Some insurers offer this coverage as a standalone policy or in combination with the dwelling portion of commercial property insurance.
