This might be one of the broadest categories for business owners, but perhaps the most important one to learn about since having general liability insurance will keep you covered for many problems or issues that may arise – even problems you might not have imagined existing or thought about yet.
General liability insurance covers a variety of issues that may arise, including property damage, physical injuries, defense costs, and personal & advertising injury.
Basically, anything that occurs during normal business operations that causes injury or property damage to your customers.
While general liability insurance covers many of the issues that may arise throughout the course of doing business, keep in mind that you may need to acquire other types of insurance as well depending on the type of business you have and the services you provide.
What is General Liability Insurance?
Commercial general liability insurance protects your business from any claims made by another person or business in regard to bodily injury and the associated medical costs as well as damage to their property.
It can also be referred to as business liability insurance or commercial general liability insurance.
This type of insurance provides help covering things like medical expenses and attorney costs that result from bodily injuries or property damage that you and your company be held legally responsible for; for instance, if one of your employees injures a customer while they were doing work on their premises, or if an employee causes a fire or other damage to other property, then your business liability or general liability insurance should cover the costs.
The costs of general liability insurance vary according to your business and your needs, but you can work with an insurance broker who will help you pick the right plan.
Depending on the size of your company, the type of work you do, and many other factors, general liability insurance can be as low as several hundred dollars per month or significantly higher.
Why Do You Need General Liability Insurance?
If you interact with clients face to face (meaning you visit their home or place of work, or they visit yours) then you need general liability insurance.
This will protect you from accidents or issues that can arise, including physical injury, property damage, defense costs (in the case of a lawsuit), and personal injury or advertising injury.
You definitely need general liability insurance if you have a storefront or other business location that is open to the general public (e.g. your customers come into your place of business and meet with you or team face to face) if you rent business space, go to job sites and interact with people, sell products to customers, and advertise or market your business.
So basically, any business owner!
If you have a sole proprietorship, you also need insurance – to protect your business and to protect your own personal assets!
Since you and the business are essentially one and the same if you are a sole proprietor and you haven’t formed an LLC or similar, you could risk bankruptcy if you are sued for property damage, bodily harm to a customer, libel or slander.
You should be aware that homeowners or renters insurance doesn’t cover losses related to running a small business, so you need separate liability insurance even if you are the only person involved.
What Type(s) of General Liability Insurance Do You Need?
Having the correct insurance is crucial for protecting your company and all your hard work.
If you are a contractor or consultant of any kind you probably need general liability insurance.
Landscaping companies, IT companies, real estate agents, and similar professionals all should hold general liability insurance as well.
However, some types of businesses require more than just basic general liability insurance.
If you rent or own a storefront, transport yourself, employees, and goods or products in company vehicles, or provide professional education or training services, then you most likely need additional liability insurance.
If you have an e-commerce based business, are active on social media, or perform any kind of transactions online, you may want to make sure that cyber crime, identity theft, data security breaches, and any other kind of hacking or related issues are covered under your commercial or general liability insurance policies.
What is Covered Under General Liability Insurance (and What Isn’t)?
A significant amount of things are covered under general liability insurance, including bodily injury to third parties and damage to third party property (e.g. your customers are injured or experience property damage as a result of their interaction with you or your employees), personal injury, advertising injury, electronic data liability, medical expenses, defense costs, supplemental payments, and action of your full-time, part-time, or temporary employees that may result in the aforementioned issues.
But you should also know what is not covered under general liability insurance.
For instance, your business property, associated vehicles including boats (and the more obvious vehicles like vans, trucks, or cars), any personal identifiable information (think identity theft), professional services, workers compensation for employee injury, don’t apply under general liability insurance.
Of course, you should always ask the insurance broker that supplies your general liability insurance for exact details of your coverage.
If your business is high risk or anything else that would fall outside the bounds of a standard policy, be sure to increase your coverage even if it means a higher premium – better safe than sorry!
How Do I Choose the Right Type of General Liability Insurance?
Selecting the correct type of general liability insurance can be complicated, which is why we always suggest that you consult an insurance broker to determine exactly what types of general liability insurance policies will keep your business covered and best protect your interests.
While every business owner’s circumstances are unique, there are certain commonalities that most entrepreneurs and business owners need to keep in mind when purchasing a general liability insurance policy.
For instance, renting a commercial space usually requires general liability insurance, or a client will likely want proof of general liability insurance if you are working out of their office or using their equipment.
If you’re running an advertising campaign or launching a website, you’ll want protection against accidental libel or slander as well.
What Other Types of Insurance Are Related to General Liability Insurance?
Professional liability insurance or errors and omissions insurance (also referred to as E&O insurance) is similar to general liability insurance, but differs in the sense that it specifically covers financial harm to your clients that occurs due to errors or omissions on your company’s part.
Like general liability insurance, it covers the costs of civil suits and some of the damages that may be awarded.
If you’re in the medical or legal profession, any kind of business consultant, or in related professions focused on providing advice and guidance you should carry this specific type of insurance in addition to general liability.
Management liability insurance may also be bundled with general liability insurance for corporate entities; this type of insurance is meant to protect the directors and officers of a corporation from the costs and damages that may arise from a lawsuit.
Before you launch a business, promote your business, or get your first clients, it’s essential that you get your insurance policies in order.
General liability insurance can cover a lot of ground, of course, but depending on the type of company you have or the professional services you offer, you may need more specific policies as well.
Consult with an ASCO Insurance agent and get all the details as to what you need, and make sure that you are covered.
