Running a business requires a lot of hard work, money, and effort. It’s difficult, and there is the constant risk of financial losses, accidents, property damage, and other liabilities that can have a negative effect on the success of any operation. The good news is business owners can get some peace of mind when they buy insurance to protect themselves for any unfortunate scenarios. General Liability insurance is the most common type of business coverage and protects businesses against several risks. Take note, however, that the General Liability insurance can vary in coverage. It’s essential to have coverage that meets the specific needs of the operation.
Five things to consider when buying General Liability insurance
- General Liability insurance varies in scope or type of coverage, but at a high level, it covers bodily injury such as slips or falls within business premises, harm or injury caused to customers, damage to property from things like fires, copyright infringement, and damage to the individual’s or business entity’s reputation.
- Understanding the coverage limit is crucial when a business is considering buying this type of insurance (and all types of policies, for that matter). Business owners need to take into account their type of the business, the risks that specific geography could pose, and possible risks of day-to-day activities.
Usually, small business owners get policy coverage with a limit of $1 million for every occurrence. They can also get coverage of $2 million aggregate. With this coverage, the insurer will cover up to the coverage limit, while the aggregate refers to the upper limit applicable for the period, which, in most cases is one year.
- The cost of General Liability insurance depends on several factors, one of which is the nature of the business. For example, insurance for sporting goods stores is very different from insurance for a construction company. The location of the business also plays a role, as states give different amounts when it comes to lawsuits related to bodily injuries. The severity of claims, risks to properties, and history of claims are also essential aspects that will have an impact on the premiums business owners need to pay for this type of insurance.
- Buying General Liability insurance is not a requirement by law. However, it is typically required in work-related agreements and by landlords. Bear in mind that running any business is risky, which means that unexpected liabilities or accidents can always occur. Without comprehensive coverage to safeguard the operations, any claim can mean shelling out a lot of money for the legal expenses and medical bills for customers who sustain injuries. With General Liability insurance, business owners have one less thing to worry about and they can focus on other essential aspects of the business.
- Business owners can take steps to reduce risks. Buying General Liability provides protection from unplanned costs, but business owners need to keep risks to a minimum by adhering to the regulations and making the safety of clients, employees, and customers a priority. Some of the things business owners can do to reduce General Liability risks and claims include maintaining a safe work environment, placing warning signs in any potentially dangerous area, testing and verifying products, and providing complete product details.
General Liability insurance is one of the most common commercial insurance policies, but be sure to look at your specific industry to make sure you are fully covered for any unfortunate scenario that could come up. If you have employees, you might be required to have Workers Compensation and if you handle a lot of contracts you might want to consider having Errors & Omissions coverage.
When you are considering different types of insurance, it’s always advisable to work with a trusted insurance agent who understands your specific industry and the risks associated with it. And finally, always read the small print to make sure that you know exactly what is and is not covered and what the limits are for the policy. With the right coverage, business owners can sleep well knowing their business is covered for anything that might come up.