Why You Need Business Insurance General Liability Coverage
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Business insurance general liability is also known as commercial liability insurance, and it protects you and your business from general claims that involve bodily injury and property damage to others.
Essentially, general liability coverage can protect you if someone gets hurt on your premises or if they get sick after eating your food at your restaurant.
Even if the claim was frivolous, this type of coverage can make sure that you aren’t left paying the bill yourself.
Generally speaking, there are two types of business insurance general liability policies you can purchase – broad form and occurrence form – and each one provides its own set of protections.
Types of Claims
Commercial General Liability (CGL) insurance is one of the most important types of insurance for small business owners.
It financially protects you and your business from claims that involve bodily injury and property damage.
These types of claims can come from customers, vendors, or even passersby. If you don't have CGL insurance and someone sues you, it could ruin your business financially.
That's why it's so important to have this coverage! Plus, there are other benefits such as having attorneys on retainer to help with difficult cases.
There are also some limits you should know about when selecting a policy.
For example, if you're only in business a few months per year but want to cover yourself all year long, that might be considered an exclusion by the insurer.
Another would be if you need to insure something that's not listed in the description of the CGL policy.
The bottom line is that it's essential to take time out to review your risks and figure out what you need before jumping into a new general liability insurance plan.
What If a Claim Is Filed Against My Company?
If a claim is filed against your company, business insurance general liability will help cover the cost of legal fees and any settlements or judgments that are awarded to the plaintiff.
In some cases, it can also help pay for the cost of medical treatment if someone is injured on your property.
Without this coverage, you could be on the hook for thousands of dollars - or more - out of pocket.
What’s The Cost? :
The average commercial liability premium in 2017 was $790 per year according to the NAIC.
Factors such as industry type, location, and policy limits affect what your premiums would be. For example, if you have higher limits then the premium would go up but so would the amount of protection.
Additionally, discounts may be available for bundling other types of policies like auto or workers' compensation into one package.
If you're interested in learning more about how commercial liability insurance works and its importance, read our blog post:
- What Does Commercial Liability Insurance Cover?;
- How Much Is It And Why Do I Need It?;
- Types Of Claims Covered By Commercial Liability Insurance;
- Discounts And Company Size.
There are typically two different ways for businesses to qualify for discounts with commercial liability insurance:
- being an A-rated company (i.e., having no recent claims)
- being a small company (i.e., less than 100 employees).
Larger companies typically need less coverage because they already have large amounts of money and assets at risk due to their size.
That's why they typically pay lower rates than smaller companies that don't have the same safety net.
I Can’t Afford to Get This Policy.
Many business owners think that they can’t afford to get a business insurance policy, but the truth is that you can’t afford to NOT have one.
If you are sued, the costs of defending yourself and your business can be astronomical, and if you lose, the judgments against you could put you out of business entirely.
A good business insurance policy will protect you from these kinds of risks, and while the premiums may seem like a lot, they pale in comparison to the potential cost of not having coverage.
For example, according to CBS News (August 5th), the average cost for a defense attorney is $200 per hour; thus it would take only three hours of legal time at $200 per hour to equal what an average monthly premium would run you.
I Can't Afford to Get this Policy:
Many business owners think that they can't afford to get a business insurance policy, but the truth is that you can't afford to have one.
If you are sued, the costs of defending yourself and your business can be astronomical, and if you lose, the judgments against you could put you out of business entirely.
A good business insurance policy will protect you from these kinds of risks, and while the premiums may seem like a lot, they pale in comparison to the potential cost of not having coverage.
A good business insurance policy will cover:
- -property damage due to fire or natural disaster
- -coverage for lost profits in the event of theft or other property loss
- -loss of documents due to fire or another disaster
- -legal fees associated with lawsuits filed against you by customers or employees
- -liability coverage for any damages caused by you to someone else's property or person
- -professional liability coverage for anything related to your business work, such as errors and omissions
- -protection against any third-party claims made against you
- -excess liability protection for when the limits of your general liability insurance don't quite cut it
How Does This Policy Work?
Commercial liability insurance, also known as business insurance general liability, protects you and your business from general claims that involve bodily injury and property damage.
This type of policy can help cover:
- the costs of medical expenses,
- legal fees,
- damages that may be awarded to the plaintiff in a lawsuit.
- how many employees are working for the company
- how much risk they represent to the company.
Do I Need To Buy Other Coverages?
No two businesses are alike, so it's important to tailor your insurance coverage to fit your specific needs.
That said, most businesses will need to purchase some combination of the following types:
- insurance business liability coverage (also known as commercial general liability),
- product liability,
- business interruption,
- and workers' compensation.
These four coverages can be purchased separately or in a combined package.
Read more about these various forms of business insurance on our blog:
business liability coverage is also known as commercial liability insurance, and it protects you and your business from general claims that involve bodily injury and property damage;
product liability is designed to protect you against lawsuits arising from defective products;
business interruption insurance helps replace lost income if your operations are interrupted by fire or another covered disaster;
lastly, workers' compensation covers medical costs for employees injured on the job.
Workers’ compensation provides benefits regardless of who was at fault for the accident and may even provide an employee with payments when they cannot work due to an injury sustained on the job.
In order to provide these vital benefits, this form of insurance must be purchased before any injury occurs and typically requires premiums based on payroll.
What Are Exclusions To This Policy?
Generally, business insurance policies exclude claims that result from:
- professional services,
- criminal acts,
- damage to property owned by the policyholder.
So if you're a professional service provider, make sure you have the right type of coverage.
And if you're planning on committing any crimes, well... don't.
Finally, check your policy to see what kind of coverage you have for your property - it may not be as comprehensive as you think.
One important consideration when purchasing commercial liability insurance is the occurrence period.
The period of time over which this type of liability insurance will protect you can be anywhere from one year to five years, with an average being two years.
Commercial liability insurance will help protect your business against lawsuits in case someone gets injured while at or near your place of work, or because they are on or near your premises due to negligence (or other wrongful act) by an employee or another third party.
How Much Does This Coverage Cost?
When you're running a business, the last thing you want to worry about is whether or not you're properly insured. But not having the right coverage can end up costing you a lot more in the long run if something goes wrong.
There are many different types of business insurance and it's important that you find the one that best suits your needs.
One type of business insurance that most businesses need is general liability coverage, which protects against injury claims related to products and services sold.
If someone gets injured because of something you sell them, this coverage would help pay for their medical bills and other expenses.
General liability also covers any damages you might cause as well as legal defense costs should someone decide to sue you for some reason
. The cost of this type of insurance varies from company to company so be sure to do your research before signing anything.
However, on average, it will only cost about $300-$500 per year.
That's pretty cheap considering the peace of mind you'll get knowing your business is covered.
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