It’s an unfortunate reality that lawsuits are increasingly common among businesses, and whether you’re just starting out on a new career path or you’re well established in your industry, you’re at risk for getting slapped with one. If you own a business, you need protection – General Liability (GL) is a great start. If you’re a small business owner, freelancer or sole proprietor looking for insurance coverage, you’re probably considering a General Liability policy. And if you aren’t considering one, you probably should be.
You may also have noticed that parties (organizations, venues, clients) that are hiring you to do a job for them are increasingly paying attention to whether or not you have General Liability insurance. This is because, in case an incident occurs and you don’t have adequate protection, your client / venue / general contractor may be left holding the bag. Furthermore, having robust General Liability protection is a sign of professionalism and experience – and can set you apart from your competition as you are looking to take on additional projects and grow your business.
What does a commercial General Liability policy cover?
To put it simply, this is the centerpiece of a business policy, the basic insurance that’s going to protect you against claims and lawsuits that have the potential to threaten the livelihood of your business. The basic coverage has three main components: bodily injury, personal injury, and property damage.
Bodily injury, sometimes referred to as, “slip-and-fall,” is the portion of the policy that’s going to cover claims for physical injury to a third party. Whether it’s a customer tripping in your store, or you dropping something heavy on a client’s foot, this addresses any scenario wherein you might be liable, or legally responsible, for bodily injury.
This is not to be confused with personal injury, which you can think of more along the lines of damage to a party’s name or reputation. The charges might include libel, slander, and/or defamation, and in some policies you might also find a clause for copyright infringement or advertising injury under this coverage. If you or your business have an active social media or internet presence, this part of the policy is going to be especially relevant!
Now, say you’re a contractor and you’re out on a site for a job. All is going according to plan, when suddenly you scratch the hardwood floor, knock over an expensive vase, or start a small electrical fire. These are the scary scenarios that the property damage aspect of your policy is designed to cover.
Even though most GL policies will have these things in common, that doesn’t mean they’re all identical! Make sure when you’re comparing policies that you take note of any exclusions or alterations that might affect the quality your coverage.
Do I need General Liability insurance?
Every business is at risk for an unfortunate accident resulting in injury or property damage, and therefore every business is at risk for getting hit with a claim or lawsuit. These can cost your business hundreds of thousands of dollars, while insurance generally runs you a small fraction of that. The responsible business owner plans ahead and invests in the safety of their business. Furthermore, not having GL insurance signals to clients that you may not be serious about what you do, while having robust coverage can help set you apart from competition and give your business a boost.
What does GL NOT cover? What other kinds of insurance might I need?
While fairly broad, GL doesn’t cover everything. For instance, you’ll need Worker’s Compensation to cover injury to yourself or your employees, since that’s normally excluded from a GL policy. Property coverage’s for your office space, equipment and/or autos are offered as premises insurance, inland marine, and commercial auto, respectively. If you sell a good, you should also consider product insurance, and if you are in a services industry, you should research professional liability.
OK, I’m convinced I need a General Liability policy. What’s next? How do I buy?
Congratulations – we think you are making a great choice for your business. The next step is to find a provider who is focused on your industry and can offer a product that specifically tailored to your needs, priced well, and will come with outstanding service. Doesn’t sound like an easy task? It’s not – and we are here to help, though we encourage you to explore a variety of options and settle on the product that gives you the best value for your dollar.