General Liability Insurance: Protecting Your Business from Legal Risks

As a business owner, you must protect your company from any legal risks that could threaten its success. One way to do this is by getting general liability insurance. In this article, we will explore the different aspects of general liability insurance, its importance, and how it can benefit your business.

What is general liability insurance?

General liability insurance is a type of insurance that covers your business against claims of bodily injury, property damage, personal injury, and advertising injury. It is also known as commercial general liability insurance or CGL insurance.

Why is general liability insurance important for your business?

As a business owner, you are exposed to various legal risks that could potentially harm your company’s reputation and financial stability. General liability insurance provides protection for your business against these risks, ensuring that you can focus on running your business without worrying about legal issues.

What does general liability insurance cover?

General liability insurance covers four main areas of liability: bodily injury and property damage, personal and advertising injury, products and completed operations, and medical payments.

Bodily injury and property damage

Bodily injury and property damage coverage protects your business against claims of physical harm or damage to someone else’s property. This could include injuries sustained by customers, vendors, or other third parties while on your business premises.

Personal and advertising injury

Personal and advertising injury coverage protects your business against claims of non-physical harm caused by your business operations, such as defamation, copyright infringement, or invasion of privacy.

Products and completed operations

Products and completed operations coverage protects your business against claims of damage or injury caused by your products or completed services.

Medical payments

Medical payments coverage provides coverage for medical expenses incurred by someone who is injured on your business premises, regardless of whether your business is at fault.

What is not covered by general liability insurance?

General liability insurance does not cover all types of risks. For example, it does not cover intentional harm caused by your business or damages resulting from professional services provided by your business. These types of risks may require additional coverage, such as professional liability insurance or cyber liability insurance.

How much does general liability insurance cost?

The cost of general liability insurance depends on various factors, such as the type of business you operate, the level of risk associated with your business, and the coverage limits you choose. On average, small businesses can expect to pay between $400 and $1,500 per year for general liability insurance.

How to choose the right general liability insurance for your business?

Choosing the right general liability insurance for your business can be a daunting task. Here are some tips to help you make the right decision:

Understand your business risks

Identify the specific risks associated with your business operations and choose coverage that addresses those risks.

Check the coverage limits

Make sure the coverage limits are adequate to protect your business against potential claims.

Review the exclusions

Be aware of the exclusions in your policy and consider adding additional coverage if necessary.

Compare the policies and premiums

Compare multiple policies and premiums to find the coverage that best fits your budget and needs.

How to file a general liability insurance claim?

If an incident occurs that could result in a claim, it is important to act quickly. The steps to file a general liability insurance claim typically involve:

Reporting the incident to your insurance company as soon as possible
Gathering any necessary information, such as witness statements or police reports
Providing the insurance company with any requested documentation, such as invoices or medical bills
Cooperating with the insurance company’s investigation
Receiving a decision from the insurance company on whether or not the claim will be covered

Useful Links

Small Business Administration: Understanding General Liability Insurance – CLICK HERE
National Association of Insurance Commissioners: Business Owner’s Policy – CLICK HERE

Conclusion

In conclusion, general liability insurance is a critical component of protecting your business from legal risks. By understanding the coverage options and exclusions, as well as taking the time to choose the right policy for your business, you can have peace of mind and focus on growing your business without worrying about potential legal issues.

FAQs

Is general liability insurance required by law?

No, general liability insurance is not required by law, but it is highly recommended to protect your business.

What is the difference between general liability insurance and professional liability insurance?

General liability insurance covers claims of bodily injury, property damage, personal injury, and advertising injury, while professional liability insurance covers claims of negligence or errors and omissions related to professional services provided by your business.

What is the average coverage limit for general liability insurance?

The average coverage limit for general liability insurance is $1 million per occurrence and $2 million aggregate.

Can I cancel my general liability insurance policy at any time?

Most insurance companies allow policyholders to cancel their policy at any time, but it is important to review the terms of your policy and any cancellation fees that may apply.

Can I get general liability insurance if I operate my business from home?

Yes, many insurance companies offer general liability insurance for home-based businesses. However, it is important to ensure that your policy covers any risks associated with operating your business from home.