Why Does My Small Business Need General Liability Business Insurance?

Don't Slip get General Liability Coverage for your small business

What Does General Liability Insurance Cover?

General liability insurance is designed to cover the assets of your LLC, your SMB, brand-new business, company, or corporation. General liability (GL) insurance protects business owners in the event of accidents that may occur on the business property, including but not limited to injuries to employees, customers, or contractors.
 
If someone trips over a tire at your body shop and gets and injury resulting in medical bills, general liability coverage can help to protect you from having to pay for that person's injuries out of your own pocket.  Additionally, lets say that the tire was left in an open area where it should not have been, by you or one of your employees, as the business owner you could potentially find yourself facing an expensive lawsuit from the injured party. Again, your general liability insurance can be utilized to help pay for court costs and settlements associated with the claim.
 
What if you own a construction business and one of your employees has an accident driving a backhoe? There are significant insurance risks associated with heavy construction equipment. If an employee makes a mistake and runs into someone’s car/truck or the fence of the business next door, a general liability policy can be used to help cover that property damage claim.
 
If your small business rents its location, a general liability insurance policy is also designed to help cover damages to a rental property. So, if you rent a building for your bakery and an employee accidentally starts a fire, you as the owner of the business have a responsibility and will likely be held liable for the significant risks and damage associated with the accident. In this case, it is your GL coverage that can help you to pay the additional costs to fix the damages
 
Another way GL policies are beneficial to a business would be coverage associated with false advertising complaints. Let’s imagine that you claim to be the fastest growing lawn care company in town, but your competitor can prove that their business is growing faster. A general liability insurance policy can protect you in the event of a lawsuit. In much the same way, your GL insurance applies to cases of slander, copyright infringement, etc.
 

How Much General Liability Insurance Coverage Do I Need?

How much general liability coverage you need depends greatly on what type of company you own and the types of risks associated with the business. Some businesses are inherently riskier than others. From the examples listed above, it is likely that the owner of the construction company will require more insurance than the owner of a bakery, because of the fact there is a higher risk of injury and property damage in the construction industry.
 
Laws associated with each state’s Department of Insurance vary widely. If your business is located in a state where general liability insurance claims tend to have larger settlements in favor of the claimant, then you may want to consider increased insurance coverage. Or perhaps your business is less concerned about its risks because your state favors small business owners. In that case, a business owner’s policy (BOP) may be a more suitable fit for your needs. A BOP can be a good packaged deal for obtaining both liability and property insurance at a lower rate.
 
A high-risk business or LLC that is very concerned with its liability requirements (e.g., heavy-duty painters, electrical contractors, construction companies, or other industries requiring OSHA-certified employees), may want to buy an inexpensive, umbrella insurance policy. An umbrella policy can increase the coverage limits on a business owner’s current general liability policy, which protects the small business in case a lawsuit ends in favor of the claimant.
 
Whatever you decide, think about what you can do to maintain a safe storefront and work environment, and to avoid unnecessary risks.
 
Lastly, be sure that the insurance coverage limits are high enough that your company is covered in case of an expensive insurance claim or lawsuit. If you don’t feel comfortable with the coverage limits on your existing insurance policy, Infinity Insurance agents can help you add additional coverage or find another way to serve your insurance needs.
 

Claims

If an accident occurs, it is often a good idea to inform your agent of all the details so that they can help in filing your claim. Insurance agents are licensed by the state to help advise you in insurance related matters.  A good agent will know what general information you will need to file your and will work on your behalf to help resolve your issue quickly and efficiently.
 
The insurance claim payout process will work within the coverage limits you selected, in much the same way that your auto insurance does. This can mean, in some instances where your coverage is lacking; you may be liable for expenses that exceed your limits. So be sure that you choose the coverage that best serves your needs and the needs of your small business. Give us a call at 1-800-INFINITY or visit our Commercial General Liability page to start the consultation process.

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