If you own a business and deal with customers and clients, you need to get insurance for your financial protection. General liability insurance protects you in case anyone tries to sue you.
We talked to a panel of experts on why general liability is so important for your business. Our panel includes;
The experts explain why you need general liability insurance;
Business Insurance protects a company or a business's assets and pays for financial responsibilities like medical costs or property damages caused by you or your employees. This insurance also covers legal expenses for a defense attorney if you find yourself in a lawsuit. The cost of business insurance will vary based on the type of business you run and the coverage you are looking for.
Many business owners think that insurance can be too expensive or that they will be fine without it. Let's look at just one example. You own a small shop selling baked goods, a customer falls and breaks their leg in your bakery, could you afford the possible $20,000 or more for medical fees out of pocket? What would this do to your daily operations?
The effect of an occurrence like this could cause your business some big problems. Compare this hypothetical to the minimal cost of a business insurance policy. When buying business insurance, you not only are protecting your business, but you purchase peace of mind as well.
A general liability insurance policy is an essential requirement for most businesses. You need it for several purposes:
Compliance with State Laws: Commercial auto insurance is a mandatory insurance policy in most states, and it includes auto liability cover for vehicles owned by the business. It is also a state requirement for the business to have workers' compensation insurance to protect employees against any injuries sustained while at work.
Help in Signing a Lease: In many cases, the commercial property managers will request general liability insurance before they allow you to sign a commercial lease agreement. This is because they understand how costly an accident can be.
Business owners should carry general liability insurance because it protects their assets. Most notably, GL policies protect business owners up to a certain amount (this amount is agreed upon by the business owner and their insurance provider). Any damages a patron or other party suffers up to this amount will be covered by the policy.
For example, if a business owner has a $1,000,000.00 GL policy, and an individual is injured on their property, any settlement or verdict of $1,000,000.00 or less will be covered entirely by the insurance company via the GL policy.
Additionally, many GL policies carry with them provisions that will allow the insurance company to hire and pay for an attorney to defend the business owner in the event that there is litigation involving the covered event. Without the expertise to know which attorneys are good at defending which cases, business owners may make poor hiring decisions when choosing attorneys to defend them. This provision eliminates that guesswork. Instead, the insurance provider is able to use its extensive experience defending insurance claims to retain the best attorney possible for the legal issue at hand.
Finally, GL policies keep business owners in compliance with banking agreements and local laws and regulations. Many different types of business loans require the business owner to carry a GL policy. Failing to do so could put the business owner's funding at risk. Additionally, if a local ordinance requires a business to carry a liability policy, a good GL policy can satisfy that requirement while also providing all of the protection described above.
General liability insurance protects businesses against common risks such as customer harm, property damage, and advertising injury. It safeguards your small business against significant litigation expenses and enables you to qualify for leases and contracts. Most small companies require this insurance, mainly if they rent or own office or commercial space. Additionally, many client contracts include provisions requiring general liability insurance.
Getting General Liability Insurance aids your business in maintaining financial stability. Any liability claims to your business could cost you a lot, so getting this insurance will be the best choice. These claims include physical injury and property damage claims where your business inflicts any damage to customers through accidents.
In many cases, it also includes Advertisement Injury where a competitor claims your company to be defaming their image. Copyright Infringement and Reputational Harm are liability claims that can also cost you a lot. These additional expenses will be sure to take a toll on your business. That's why it is best to ensure that your company has the insurance.
You need liability insurance because, without it, one lawsuit could cost you so much that you won't be able to recover financially, and you’ll be forced to shut down. General liability insurance protects businesses' financial stability. If someone slips inside your office and breaks their leg, requiring surgery, your business will be liable for all the associated costs, which could easily exceed $50,000.General liability also covers lawsuits for copyright infringement, advertising injury, and reputational harm.
If you don't have a general liability policy, your business is at constant risk of going under due to an accident. A lawsuit is stressful enough without adding the risk of losing your business over it. General liability coverage can give you the peace of mind to focus on your work.
Arthur Williamson graduated with a degree in Business and Management at the University of California, Berkeley. He is knowledgeable about what small and big businesses require to keep operations moving.