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The Importance of General Liability Insurance at a Small Business

Hugh Grant

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The Importance of General Liability Insurance at a Small Business

Owning a small business comes with many responsibilities and liabilities. A commercial general liability policy is a necessity to protect you and your business from liability claims and damage claims. Your business can be liable for many injuries and damages that are costly to settle The right insurance will help keep you in business.

What is General Liability Insurance?

Your general liability policy is considered comprehensive insurance. Its purpose is to cover damage or injury caused by your company’s operations. Injuries that take place at your business are also covered.

Shop owners face these issues frequently. Customers have legitimate slip-and-fall accidents. Manufacturers put out flawed products that could cause harm. A farm operation animals can escape and cause damage. The list of potential liabilities is endless.

Types of Liability Coverage

You can choose several types of general liability coverage:

Premises Coverage: You may choose a policy with premises coverage, which covers your company in case accidents occur in your commercial space during business hours. If a client is injured in a physical building, this type of coverage protects you from financial claims.

The policy may also cover bodily injury and property damage from products and services completed at another location.

Excess Liability Coverage: Some business people choose to add excess liability coverage for large claims that may be greater than your basic CGL policy. This type of policy protects you from cataclysmic incidents that could close your doors if you had to pay the cost.

Be aware that some policies exclude certain claims. For instance, product recalls may not be covered.

Claims-Made Vs. Occurrence Based

You can also choose claims-made policies that protect you whenever someone makes a claim. Occurrence policies cover events that happened during the coverage period even if you have let the policy expire. Your insurance agent can advise you on the type of coverage you need.

Liability Examples

The slip-and-fall accident is common, but other situations can put your company in danger of large claims. If you publish an ad or article that libels someone, you could face a huge legal award to the injured party. If your business provides a service in customers’ homes, you could be responsible for damage to the home. Perhaps your heating and air technician inadvertently starts a fire. That would result in a costly claim. You need the right general liability coverage to pay for legal representation and potential financial awards.

General Liability Insurance: A Must

Unless you are a hard-core gambler, you need to purchase general liability insurance before you open the doors of your company. Just one serious injury on your premises could shut you down if you are not covered by insurance.

Consult with an experienced insurance agent and learn what policy types are best for your company. Comparison shop among general liability policies to find the best price and coverage combination. The cheapest policy may not be your best choice. Remember, some customers are litigious by nature. You need an experienced insurance team to protect you.

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