If you’re a business owner, general liability insurance is one of the most important ways to protect your business. It’s kind of the bread and butter of your business insurance plan. General liability is a lifeline if you ever face a liability-related claim, meaning that someone is bringing charges against your business because they think you caused them physical harm or property damage.
But what exactly will general liability protect your business from? And how much of it do you need? Those are the million-dollar questions, so let’s dig into what general liability does.
What does general liability protect my business from?
To put it in handy-dandy bullet points, general liability insurance will protect your business from claims of…
- Bodily injury or another physical injury.
- Personal injury (libel or slander).
- Advertising injury.
- Property damage.
That’s putting it in broad terms. GL covers the expenses of legally defending and settling claims of liability. Basically, if someone says that your business caused them harm in some way, it’ll be your liability insurance taking care of the claim by covering the costs of any damages you’re legally obligated to pay.
What does GL cover?
Every insurance policy is different, so it’s important to make sure that you know exactly what is and is not covered. The following situations may be covered by your general liability insurance (depending on your policy):
- Automatic additional insured: This protects you from liability resulting from written contracts/agreements.
- Personal and advertising injury: If you or your staff makes a comment that makes somebody super angry, this will protect you from the lawsuit that could result. This will protect you from allegations of libel, slander, disparagement, or copyright infringement.
- Defense costs: This will cover the legal expenses if someone brings a liability claim against you, no matter if you actually did what they said you did or not.
- Medical expenses: If someone is hurt on your property, like they tripped over a rogue chair, this will cover their medical expenses. Likewise if they’re injured by one of your products.
- Premises and operations: This means that GL covers you if someone is injured on your premises or due to your business’s operations.
- Products liability: This provides coverage for bodily injury or property damage that happens to someone due to your products.
Pro tip: General liability is included in a business owner’s policy, or BOP, along with business interruption insurance and property insurance. You might want to find out if a BOP is right for your business.
How much GL coverage does your business need?
Well, that depends on your business itself. No two businesses are the same, but there are a few things that will determine how much coverage your business needs to make sure that it’s protected from any of the liabilities that could come its way.
1. Perceived risk: How much risk or danger is associated with your business operations and functions? As you can imagine, a factory might have more risk than, say, an office building.
2. Where your business is located: Is your state known to award the injured party in liability lawsuits high damages? If they do, you might want to make sure that you have a robust general liability policy.
3. Type of product manufactured: Do you supply or create a product that’s dangerous? Your risk is going to be higher, which means that you need more insurance coverage.
Ways to bolster the power of your general liability:
There are some situations that general liability won’t cover. To make sure that your business is protected, you’ll need to add any necessary extra coverages, such as property insurance, crime insurance (which will help you protect your business from threats like burglary), or commercial auto. You can also add umbrella coverage, which will cover additional costs if your policy’s limits are exhausted. Umbrella is pretty much an “in case of emergency” coverage.
General liability is essential when it comes to protecting your business. You don’t know what’s going to happen next week, tomorrow, or even in five minutes. You never know when an accident might happen or a lawsuit might get served. To avoid being caught facing the costs of legally defending your company, not to mention paying out the money that you’re legally required to pay to the injured party, make sure that you’ve got enough general liability to truly protect your business from anything that could come your way.
If you’d like to get a free quote on your commercial general liability insurance, we’d be glad to help you out with that. We’ll take the time to get to know your business and understand your specific risks, and we can help you find the best possible rate on your insurance. All you have to do to get started with your quotes is fill out our online quote form or give us a call today.