For any entrepreneur, running a business involves a fair share of risk. You must be concerned with your company’s financial stability and reputation, the well-being of your employees, and the health and safety of your consumers, among other things. It is a delicate balance between what should be done and what is required of you.
General liability insurance falls into that category. The state may not enforce you to carry it, but is it a good idea to have? Keep reading for all you need to know about this beneficial coverage and whether it is something you should purchase.
General liability policies cover bodily injury and property damage your business may cause.
These policies also provide coverage for personal injuries, such as libel, slander, and copyright infringement.
All businesses, regardless of size, can benefit from a general liability policy.
You should speak to a licensed insurance agent to determine how much coverage you need.
What Does General Liability Cover?
General liability insurance is a commercial lines policy that protects businesses from lawsuits stemming from bodily injury or property damage losses where they may be at fault. An example of where this policy would come in handy is a customer slipping and falling at a retail store.
If a customer gets injured and sues the business, their general liability policy would pay for a lawyer to defend them, as well as any legal fees incurred. However, general liability is still useful even if you do not have a brick-and-mortar location.
Consider a company that sells baked goods out of their home. A general liability policy would also cover any damages if a customer were to get sick from your products. In addition, a general liability policy can cover any personal injury damages, such as libel, slander, or copyright infringement and product liability, if the product you sell injures your customer’s property.
It is important to note a general liability policy will not cover the bodily injury of any employees you may have. These injuries would be covered under a workers’ compensation policy, which the state may require.
Is General Liability Insurance Required?
General liability insurance is not a requirement imposed by the state, but it may be required by certain other entities. For example, if you are leasing a retail or office space, the landlord may ask you to carry a general liability policy.
Similarly, you may be asked to show proof of a liability policy if you apply for a professional license or sign contracts with other companies or clients. Regardless of whether you are required to purchase this policy, it is a good idea for almost all businesses.
Who Needs General Liability Insurance?
When considering what type of businesses would benefit from general liability insurance, the answer is simply every business could. This is because every type of business may be faced with risks that can unintentionally cause damage to their consumer.
A lawsuit has the potential to be financially devastating to a company, and a general liability policy allows the business owner to transfer the financial risk of these lawsuits to the insurance company, leaving you to take care of more essential things.
How Much Coverage Do I Need?
A better question to ask instead is how much general liability coverage your business needs. The answer will largely depend on the type of business you run and what the exposure to any losses may be. The more risk you have, the more coverage you will need.
For example, a restaurant that sells alcohol will have a higher exposure to liability than an online T-shirt shop. In addition to factoring in the type of business you run, business owners should consider how big the company is, where it is located, how many employees you have, and who your primary customers are.
The answer to these questions will dictate how much coverage you should carry. Coverage options for liability generally start at $300,000 with most companies and can go as high as $2 million. A knowledgeable insurance agent can help you determine the specific coverage amount based on your unique needs.
Where Can I Get a General Liability Policy?
Once you get your business up and running, you should speak to a trusted insurance agent who can write the specific insurance policies you need. General liability insurance can be purchased as a standalone policy, part of a BOP, or a business owner’s policy.
However, only a licensed professional can tell you the best policies for you. The experts at Leap Carpenter Kemps are skilled in all lines of insurance and can help you protect your business. Contact us today for a quote!
My expertise lies in my knowledge from my over 15 years of experience in the commercial and personal insurance industry. My goal is to provide my clients with the proper insurance coverage at the most cost-effective solution.
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Leap | Carpenter | Kemps Insurance Agency provides Commercial Business Insurance, Employee Benefits, Life and Health Insurance, and Personal Insurance to all of California, including Merced, Atwater, Los Banos, Mariposa, Madera, Fresno, Modesto, Turlock, and Stockton.
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