If you run a business, you need to have General Liability Insurance. Not only does local government require it, but most office spaces and venues require it as well. To get proof, you can talk to your client or find out their name, address, and tax ID number. Alternatively, you can contact your insurance broker and request a certificate. In most cases, you do not need proof, but if it is required, you should get it.
Basics
The Basics of General Liability Insurance can protect the livelihood of a small business. While this type of insurance is usually packaged with property insurance in a Business Owners Policy, it can also be purchased separately by a contractor. It is recommended to get the right amount of coverage for the type of business you operate. In some cases, higher-risk businesses may opt for additional insurance coverage called excess or umbrella. Under umbrella insurance, the limits of coverage are higher than for general liability insurance.
General liability insurance protects you against claims resulting from accidents, injuries, and product defects. For example, if a product caused a slip and fall, this insurance will cover the cost of medical treatment for the person who was injured. It can also cover damages to property, including injuries caused by your employees. Additionally, it covers advertising injury and libel and slander. It also covers damages to rented premises.
Costs
General liability insurance costs vary considerably based on the type of business and the amount of risk it presents. While the type of business that attracts lower premiums is low risk, a high credit score will reduce your premiums. This policy will cover you if someone slips and falls on your property and causes bodily harm or damage. Your premiums will depend on the type of business, location, and revenue. For office-based businesses, costs will be minimal.
The cost of legal fees to defend yourself against a business claim can add up quickly. Attorney fees and court fees range from $100 to $200 an hour. While these costs vary widely, the average premium paid for legal representation may reach $100,000 or more, even if the claim does not settle. In this case, you could be left to pay for your own legal fees. And that’s without even considering the actual claim payment. Ultimately, general liability insurance is well worth the price.
Exclusions
A standard general liability policy will cover you for claims in coverages A, B, and C. However, it does not cover claims against you from independent contractors, subcontractors, or freelancers. Moreover, it only covers property damage claims made by third parties, not claims filed against you for employee injuries. Moreover, it excludes coverage for losses not caused by a physical injury, such as reputational damage.
Some of the most common exclusions of general liability insurance are listed below. For instance, if you sell dangerous cell phone batteries and a consumer gets injured, your liability insurance policy will not cover the costs of the recall and the replacement of the battery. Furthermore, general liability does not cover claims against you for intentional injury, loss of electronic data, or corruption of data. Therefore, it is important to check the exclusions of general liability insurance before purchasing it.
Requirements
While it may not sound like a business necessity, general liability insurance can protect a company from most common third-party lawsuits. This insurance will cover any legal costs that arise from injuries to customers or property damage to others. It will also cover advertising and physical damage to property. In addition, general liability insurance protects a company from lawsuits that arise from a customer’s breach of contract, negligence, or slander.
Obtaining a general liability insurance policy is an important step in securing a business’s financial stability. While it is not mandatory, most landlords require it. The insurance protects the landlord from costly lawsuits and legal defense costs. Also, many local governments require businesses to provide proof of general liability insurance, typically in the form of a certificate of liability insurance. However, obtaining this type of insurance is not always easy.
Business owners should have it
General liability insurance covers the costs associated with a lawsuit in case your business is found liable for damage to a client’s property. It is also useful for landlords, who often require their tenants to have this type of coverage as a condition of renting out their premises. In addition to reducing your insurance premium, it will cover the cost of defending yourself in court in case of a lawsuit. This coverage can help you keep your reputation intact, which is an essential aspect of any business.
While general liability insurance isn’t a necessity for every business, it is a prudent move to protect yourself from lawsuits. This insurance can cover you against lawsuits brought by third parties over a variety of incidents, including property damage or advertising liability. In addition to protecting you from lawsuits, it will also pay for defense and settlement costs. While these costs can be high, they are well worth the peace of mind that comes from knowing that your business is protected against these costly situations.