Business General Liability Insurance Guide

A business is an enthusiastic enterprise, but it is risky, as well. Customer injuries, a fire, etc. are not just the only risks as many other potential liabilities could make your business unstable. 

General Liability Insurance is the one that clears up the situation. It’s one of the most significant forms of business insurance and it provides the coverage for the costs associated with frequent lawsuits and settlements.

This article guides through the full package of business general liability insurance: what it is, what it includes, who needs it and how you can pick the most suitable policy for yourself.

What Is General Liability Insurance?

General Liability Insurance (GLI) – often referred to as commercial general liability insurance – is a type of insurance that serves the purpose of protecting a business in the event of financial losses for which it is legally responsible as a result of causing:

• Bodily injury to a third party (like a customer or visitor)
• Property damage to someone else’s property
• Personal or advertising injury, such as libel, slander, or copyright infringement

It is the foundation of the majority of insurance policies. Furthermore, it is usually mandatory when there are rental agreements, contracts, and customer agreements.

What Does General Liability Insurance Cover?

Most of the time, a standard general liability policy will cover you for:

1. Bodily Injury

The insurance will secure all medical expenses, legal fees, and court-awarded damages if it happens that the customer is injured on your business territory or if the injury occurs due to your business operations (e.g., the customer slipping and falling).

2. Property Damage

If the business you are conducting causes someone else's property to be damaged accidentally, say, if a customer's window is broken during a service call, general liability insurance will help you cover the expenses for repair or a replacement.

3. Legal Defense Costs

Legal fees may run high even if a claim is baseless. General liability insurance will assist in protection from court lawsuits.

4. Personal and Advertising Injury

This list includes the following claims:

• Defamation or slander
• Appropriation and copying of advertising concepts
• Use of someone else’s advertising materials such as logo, picture, print, or video without their consent with an intention of gaining advantage out of it

What Is Not Insured with General Liability Insurance?

Although GLI is inclusive of many things, it has some limitations. General exclusions are, for example:

• Worker injuries (which are covered by workers’ compensation)
• Mistakes or omissions by a professional (which are covered by professional liability insurance)
• Intentional harmful acts or fraud
• Damage to your business property by yourself (covered by commercial property insurance)
• Car accidents with business vehicles (which are covered by commercial auto insurance)

Who Requires General Liability Insurance?

Most businesses out there irrespective of the industry can utilize the general liability insurance policy for the protection against risks. Some of the industries that will benefit from it are as follows:

• Local store and restaurant owners
• Contractors and building companies
• In-house and freelance advisors
• Planners of events and suppliers of goods
• Sellers of merchandise online and startups in e-commerce

Even if you are freelancing or running a home business, you could still be held liable if your client is hurt or your work is the cause of the harm to them.

Actually, majority of landlords, clients, and project contracts are in need of a certification of the GLI as a prerequisite for doing business with you.

What is the Right Amount of Coverage?

The coverage required for your business essentially depends on the size and activity of a company. The standard GLI contract typically includes the following loss limits:

• $1 million per incident
• a $2 million relentless exposure (covering the whole policy term, usually one year)

More dangerous businesses or bigger ones might want to consider higher limits or a commercial umbrella policy as an extra.

Estimated Costs of General Liability Insurance

The amount varies due to factors such as:

• Trade of the business and its risk of industry
• Business size and revenue
• History of the claims
• Location
• Amount of coverage and deductibles

For small businesses, the annual average rates usually go between the $400 and $1,500 range.

Tip: Getting a Business Owner’s Policy (BOP) and adding GLI to other policies (e.g., property and business interruption) are the ways to shrink the bills.

How to Acquire General Liability Insurance

• Analyze your risk exposure - Evaluate your operations, contacts, and potential liability.
• Get quotations from different sources - Find insurance brokers or use digital platforms to procure various quotes.
• Check the reputation of the insurer - Go for companies that hold good financial ratings and amass good customer reviews.
• Thoroughly read the policy document - Know the exclusions, limits, and conditions before giving your word.
• Seek for the latest information as your business develops - Always reconsider your coverage as your business expands to make it that your risk is still very low.

Summary

General Liability Insurance not only for big corporations but also for small businesses is a must. It is designed to protect your company from various risks such as accidents, property damage, and adverse legal cases that may impact your operations. 

Thus, it becomes easier for your business to navigate through troublesome occurrences and be able to thrive under such conditions without sinking.

Do not delay the purchasing process in any case. Having a reliable GLI policy will be the best choice to do whether you are at the beginning points of establishing your company or you are on the way to the marketing intermediaries.

 

 

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