Why Your Business Needs General Liability Insurance?
No company wants to damage its reputation or finances by inadvertently causing injuries. Even more, they won’t want to wait to handle such claims because of a lack of resources. Still, even well-run businesses can occasionally make mistakes or suffer from bad luck.
General liability insurance policies protect your business against liability claims, which can drain profits and damage reputations. The professional business insurance agents at The Insurance Hub will take the time to understand your liability risks and help you find the right coverage.
What Does General Liability Insurance Cover?
Liability insurance can pay for damages and legal expenses. Imagine a customer who slipped on a crooked doormat or claimed a salesperson intentionally misled them. Reparations for some claims like these can cost a business thousands of dollars in legal representation and reimbursements. This coverage makes general liability insurance an essential risk management tool for many small businesses.
According to the Insurance Information Institute, general liability covers non-professional negligent acts. Professionals, like lawyers, doctors, and financial advisors, will still need professional liability insurance to protect themselves from claims against the quality of work or advice.
Policies generally pay for legal defense and damages awarded through settlements or adverse verdicts. Typical policies have limits that payouts won’t exceed. Policies may also have deductibles, which the business must pay before the insurer provides their share.
According to Insureon, most of their commercial clients choose a deductible, at an average of $500. The policy limits and deductibles will impact premium rates, along with the size and risk assessment of the business. Insurance companies all rely on their own propriety schemes for calculating premiums, so it pays to compare available offers before setting on the best value.
How Does Commercial Liability Insurance Add Value to Your Business?
General liability insurance lets your business run without concerns about catastrophic legal claims in case the company accidentally causes damage to another party. A standard policy includes multiple types of liability protection, including:
Some businesses may require other types of liability insurance to protect them against situations that commercial general liability doesn’t cover. Some examples of these additional liability policies include professional, Director’s and Officer’s, and employment practices liability.
Many companies also benefit from a commercial umbrella insurance policy. Umbrella insurance picks up after the limits of base policies have been exhausted. For instance, a business might hold a general liability insurance policy with a limit of $1 million in protection but get held liable for $1.5 million in damages. An umbrella policy would cover the additional $500,000. This coverage can also extend to other liability policies and is typically an affordable way to enhance coverage.
How to Buy Commercial Liability Insurance
Many small companies buy a business owner’s policy, or BOP. A BOP offers a package of essential business protection, including property and general liability insurance. This solution often saves money but may not provide the flexibility some companies require.
Typically, only small businesses in specific industries will qualify for a business owner’s policy, though requirements can vary by the insurance company. Offerings and rates can vary considerably. Plus, some insurers offer other valuable services, like risk management, to help clients avoid risks that may lead to future claims. In any case, business owners should shop around between insurers.
Contact The Insurance Hub to discuss your business. You can work with an experienced commercial insurance agent to create the best protection for your unique company.