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Also known as business liability insurance or commercial general liability insurance, general liability business insurance is the most basic form of coverage that a business needs. It is the insurance policy that covers your business against all types of accidents. These could include cases where a customer gets hurt when they’re in your workshop or if you drop a piece of heavy equipment and make a hole in a customer’s floor, or in the floor of a space you rent for your business. These are accidents that can break the bank for most entrepreneurs and general liability insurance coverage is the safety net that allows you to focus on doing great work and growing your business.
There are a few reasons that general liability insurance is essential to both protecting and growing your business. Here are some of the main ones:
Accidents Cost Money
Here are a couple of real claims we’ve covered that you could imagine happening to you: one customer was fixing a roof and a tool fell to the ground, going right through the window of his customer’s car. Another was training a client in a gym when the client lost her balance and fell backwards into a mirror. Medical bills and repairs to cars are both expensive and it will be up to you to pay for them, unless you have a general liability insurance policy.
Lawsuits Cost Even More Money
The client’s injury probably wasn’t our customer’s fault but arguing your case in court if you are sued can still be a costly endeavor. If a customer, or a customer’s insurance company, wants you to pay for bodily injury or property damage, having an insurance policy that can take care of it is often easier than fighting it out in court.
Customers Want Protection Too
If something happens, your clients need to know they won’t be left in the lurch, paying for car damage, or for replacement of a mirror. If you have general liability insurance, your clients can feel safe knowing that in the case of an accident they won’t have to spend their own money or affect their own insurance premiums. General liability claims can go into hundreds of thousands of dollars, and clients want reassurance that they won’t need to pay those sort of sums.
People Want to Work with Professionals
Even if you personally believe you and your business are immune to accidents, insurance can still help you attract new business. Your ability to send a Certificate of Insurance demonstrates to potential new customers that you’re an organized, responsible professional running a serious business. They know they can trust you to keep an eye on all the details of their projects and not to cut corners on important costs such as insurance.
Bodily Injury / Property Damage
Bodily injury is the section of your commercial vehicle policy that covers claims of physical injury to a third party. It can include medical expenses, legal fees, loss of income, pain and emotional damage, and even funeral expenses. Imagine you spend much of your workday driving between client sites. You’re on your way to a job and don’t notice that they’ve put in a new stop sign. You drive right through and hit a car coming from your right, causing injuries to the driver. Your commercial auto insurance will cover her medical bills and reimburse her for the days she’s out of work recovering.
Property damage is the section of your policy that includes third party coverage for property damage (e.g. car damage) in an accident where you are at fault.
It could also include legal fees and other expenses similar to bodily injury, but is specifically related to damage to property, rather than to people.
In this case, personal injury covers you and your employees, rather than third parties. So if your employee is delivering some equipment in your truck, loses control of the wheel and is injured, your policy will cover his medical expenses. It will also pay his wages while he’s out so that you can pay for someone to get the work done and not have to worry about how he’s getting by.
You rely on your vehicles to work. That’s why it’s important that your insurance cover damage to vehicles and not just people. This section pays for repairs or replacement vehicles if your car or truck was involved in a crash with another car or telephone pole, or even had a rollover in icy weather. If you can’t do your job without your vehicle, like plumbers who may carry their tools around, or general contractors who may move equipment between work sites, you know how critical it is that you always have a vehicle you can use for your business.
This section also covers your vehicles, but in cases other than collisions. Comprehensive coverage will help you repair or replace your vehicle after theft, vandalism, or weather-related damage. If a tree falls on your truck or your car gets flooded during a storm, this is the section that you’ll rely on. While you can prevent lots of mishaps by being careful, there are some that you just can’t anticipate, and this coverage is for some of them. Just make sure to check out the exclusions to find out exactly what isn’t covered. Keep reading for some examples.
Someone trips over your tools and breaks their leg.
Someone sues you for improper use of images in your advertising.
An employee bad-mouths a client on Facebook and the client sues you.
You drop heavy duty equipment inside your client's house and damage their hardwood floor.
Someone gets injured at your work site and asks you to pay for medical expenses instead of suing you.
You need an attorney to defend against a lawsuit even though you did nothing wrong.
Most general liability business insurance policies cover damage or injury to other people but usually won’t help if it’s your body, reputation, or property that’s been harmed. For example, if you have employees then it’s likely you’ll need to get worker’s compensation insurance (more commonly known as “worker’s comp”). This covers your employees’ medical bills and expenses in case of injury on the job. You can also buy a policy to cover your own injury but it’s not usually mandated by law.
You may also want to insure your business space, equipment, and vehicles since damage to any of those could stop you from operating. If you sell a product, you may want to consider product insurance which covers any damage caused by something you sold. If you provide a service, professional liability coverage will take care of any claims that you did your job incorrectly. While all of these are important to consider, they aren’t as basic as general liability insurance and aren’t included in most general liability policies.
Injuries to you or your employees
Damage to your equipment or tools
Products you produce
This is a brief summary of your policy and does not supersede the policy documents. If you want full details, please call us.
The average cost of general liability insurance varies widely depending on the particular field. A contracting business that does big jobs using dangerous equipment will have to spend a lot more for a comprehensive policy than a freelancer who sits in front of a computer in their own home or office. This means that most insurance companies offer general liability insurance for small businesses that range anywhere from one or two hundred dollars a year to over a thousand. The only way to know what general liability insurance really will cost is to get a quote that is tailored to your business.