General Liability Insurance: Everything You Need to Know

As a business owner, it’s important to protect yourself from potential risks and lawsuits. One of the ways to do that is by having general liability insurance. This type of insurance policy is designed to provide coverage for your business in case of accidents or claims made against you by a third party. In this article, we’ll discuss everything there is to know about general liability insurance, including what it is, how it works, and why you need it.

What is General Liability Insurance?

General liability insurance is a type of insurance policy that provides coverage for third-party claims of bodily injury, property damage or personal injury. It helps pay for legal defense fees, medical expenses, and damages in case a lawsuit is filed against you or your business.

The policy covers various situations, such as accidents that happen on your business’s property, product or service liability, and any advertising injuries. It’s important to note that general liability insurance does not cover accidents that happen to your employees. For that, you’ll need workers’ compensation insurance.

How Does General Liability Insurance Work?

When you purchase general liability insurance, you’ll pay a premium for a specified coverage limit. The coverage limit is the maximum amount that your insurer will pay for any claims made against you. The premium amount will depend on several factors, such as the size and type of your business, the industry you’re operating in, and the risks associated with your business.

If a third-party files a claim against you or your business, you’ll need to contact your insurance carrier immediately. Your insurer will assign a claim adjuster who will investigate the claim and determine if the claim is covered under your policy. If the claim is covered, your insurer will provide you with a defense attorney, and if necessary, will settle the claim according to your coverage limit.

Why Do You Need General Liability Insurance?

General liability insurance is essential for any business because it protects you from potential lawsuits that can result in high costs, reputation damage, and even bankruptcy. If a customer gets injured on your business property or if you damage someone else’s property while providing a service, you’ll be held liable for the damages, which can add up quickly.

Having general liability insurance can give you peace of mind, knowing that you’re protected from such risks. It also helps build credibility with customers and partners, as they’ll know that you’re taking your business and legal obligations seriously.

FAQs about General Liability Insurance

1. What Does General Liability Insurance Cover?

General liability insurance covers third-party claims of bodily injury, personal injury, and property damage. It also provides coverage for advertising injuries, such as libel, slander, and copyright infringement.

2. How Much General Liability Insurance Do I Need?

The amount of general liability insurance you need depends on several factors, such as the size of your business, the type of industry you’re operating in, and the risks associated with your business. It’s recommended that small businesses have at least $1 million in coverage.

3. What’s not Covered by General Liability Insurance?

General liability insurance doesn’t cover employee injuries or accidents, intentional damages, or professional mistakes. For these types of incidents, you’ll need workers’ compensation insurance or professional liability insurance.

4. Can I Buy General Liability Insurance Online?

Yes, you can purchase general liability insurance online from numerous insurance providers. However, it’s important to compare different policies and providers to make sure you’re getting the coverage you need at a competitive price.

5. Is General Liability Insurance Expensive?

The cost of general liability insurance depends on several factors, such as the size and type of your business, the industry you’re operating in, and the risks associated with your business. However, it’s generally affordable, with premiums ranging from a few hundred to a few thousand dollars per year.

Conclusion

General liability insurance is an essential part of any business’s risk management strategy. It protects you from potential lawsuits and gives you peace of mind, knowing that you’re covered in case of accidents or claims made against you by a third party. Make sure to assess the risks associated with your business and purchase a policy that provides adequate coverage for your needs.