What Does General Liability Insurance Cover?

A variety of negative circumstances can put a considerable dent in your profits. For instance, one of your employees might toss a can of white paint onto certain items. Alternately, a customer could become injured after tripping on a rug in your office. You could use some of your nest egg to deal with the litigation you are already part of.

General liability insurance can provide protection for a small business from various types of hazards (and more). It's one of the most common types of high-level business insurance.

What Is General Liability Insurance?

General liability insurance protects a company from lawsuits related to bodily injury or property damage from clients or customers. Business-related items and services, whether or not you specialize in them, could bring on this type of liability. Without general liability insurance, you might lose your business.

Business liability insurance, also known as commercial general liability insurance, is a term used for general liability insurance.

What Does General Liability Insurance Cover?

General liability insurance protects a company from claims such as bodily injury, property damage, copyright infringement, reputational harm, and advertising injuries.

• Bodily injury. A general liability claim can be a result of a lot of things. If someone comes to your place of business and is hurt, a business liability policy will provide them with health care. A bodily injury claim may be as simple as a customer falling off the shop floor.
• Property damage. Another liability claim could stem from damage to your client's property or home if you are in their company. Your company may also be legally responsible for property damage claims suffered by your customer if they are on your property.
• Copyright infringement. If you are accused of unlawfully using the work of another individual in your company advertisement or other company marketing, this claim takes place.
• Reputational harm. A situation may develop if you say something untrue about another business while interviewed for a story in the media.
• Advertising injuries. Our business can cause damage due to defamatory claims against other parties, other firms, or individuals.

Liability claims are quite common, so you want your business to be protected with the right insurance. For example, the average cost of a slip and fall case is $20,000, while the average cost of a reputational damage lawsuit is $50,000.

What Business Liability Insurance Doesn’t Cover

General liability insurance covers a lot for a business, but it does not cover everything. It will not be utilized to pay non-business related auto accidents, employee injuries and illnesses, damage to the business property, errors in professional services, claims that surpass your coverage limit, or illegal activity by you or your employees.

You'll need different sorts of business insurance to make liability for these sorts of insurance claims, including:

• Employee injuries and illnesses. Workers' compensation insurance exists to cover employee injuries.
• Auto accidents. For auto accidents when doing business, a commercial auto insurance plan financially protects you if you own the car. A hired or non-owned auto insurance protects if you use a personal car or rental car for work.
• Professional mistakes. An errors and omissions insurance (E&O) policy offers coverage for errors or mistakes during your services. Such insurance is sometimes called professional liability insurance.
• Theft and damage to your business property. General liability insurance does not pay for the theft of your business equipment or your building. General commercial property insurance is necessary to cover these kinds of problems.

Insurance does not cover intentional acts, such as a computer that you fling out the window. And general liability insurance does not help if there are deliberate, illegal acts or wrongdoings by you or your employees.

How Much General Liability Insurance Coverage Do I Need?

Businesses with most storefronts typically choose standard liability insurance with original policies totaling $1 million per incident and a $2 million aggregate limit. This policy provides an annual cover of $1 million for a single general liability claim, with a maximum lesser limit of $2 million for all claims during the policy period. His policy period is typically one year.

Is general liability insurance required by law?

Business liability insurance isn't required by law, but if you neglect to obtain coverage, your business will be vulnerable to a variety of costs that could cause bankruptcy.

How Much Does Business Liability Insurance Cost?

General liability insurance costs an average of $42 per month, according to Insureon. About 17% of Insureon s small business customers pay less than $25 each month for their policies.

General liability insurance coverage costs will depend on your business, industry, location, and the amount of coverage required.

Business liability insurance coverage choices can allow you to be able to manage general liability insurance premiums by choosing the limits that work best for your requirements. A business owners policy (BOP) is a handy and effective method for combining general liability insurance and business property insurance coverage. You can also buy general liability insurance by itself.

There are a range of things that are able to affect your insurance costs including things such as:

• Acts of your business. 
• Each high-risk industry has its own price for general liability insurance. 
• The number of years of business with the company. 
• The size of the company's building. 
• Whether it has a fire policy, a liability policy, or both. 
• The history of the insurance claims pertaining to your business.

Who Should Buy General Liability Insurance?

Listed below are places where you might see great benefit from business liability insurance coverage:

• Your company is open to the public or clients or vendors. 
• You advertise or create marketing content for your business. 
• You utilize social media personally or more professionally. 
• You utilize third-party locations for business purposes. 
• You require insurance coverage in order to be considered when applying for work contracts. 
• You have temporary employees.

What Types of Businesses Benefit from Commercial General Liability Insurance?

• Small business owners
• Landscaping companies
• IT contractors
• Real estate agents
• Consultants
• Marketing firms
• Janitorial services
• Artisan contractors

The Risks of Not Having General Liability Insurance

Facing judgments, legal settlements, and attorneys' fees without the help of general liability insurance can prove to be expensive and even bankrupt a business. Legal counsel expenses can cost nearly $100 an hour. Court costs may be more than $75,000 if the case proceeds to trial and you may need to spend several thousand dollars even if a lawsuit is dropped, according to The Hartford.

Without insurance, your business is at financial risk and you may lose customers since they won't have any desire to work with you if you don't have general liability insurance. To prove that you have insurance, you will need to post a certificate of insurance. This is an official written document that lists all of the insurance types and limits.