General Liability for Your Business
Owning a business means getting insurance. In fact, it usually means getting several kinds of insurance. That does not mean every business needs or wants the exact same types of insurance.
After all, a freelance front-end developer does not need liquor liability insurance any more than a bar needs professional liability insurance. A freelance graphic artist can typically live without business auto insurance because they possibly do not have employees or business vehicles.
But what most businesses may not be able to live without is a general liability policy. Keep reading for an overview of how business general liability insurance may help you.
Businesses often get sued. They can get sued for several reasons.
Of the various reasons for lawsuits, slip-and-fall accidents are one of the most common. It is not surprising, either, because it is so easy for those accidents to happen. Someone tracks a little snow in on their shoes. The snow melts into a slushy mess and a customer goes down. Someone spills a drink. Before anyone can clean it up, someone slips on it.
If you work on-site in people's homes or at other businesses, you may also get sued for property damage. All it takes is one careless moment and someone's treasured vase becomes shattered glass.
General liability insurance may provide you coverage for these kinds of third-party damages or for damages related to bodily injuries at your business. It could also protect you against suits of advertising, libel, and slander. The insurance provider may help to cover legal costs, settlements, or judgments against your business.
Is General Liability a Legal Requirement?
The answer to that question proves a little tricky. State governments do not typically require general liability for low-risk ventures. A freelance writer working from home does not generate a lot of risks. So, they could possibly skip it with at least some confidence.
In fact, many small businesses fall into the low-risk category. Since anyone can get sued, though, it is a risk that most businesses probably do not want to take.
State or even local governments sometimes require general liability insurance for some higher-risk businesses. For example, some cities require proof of general liability insurance before they will even issue a general contractor's license.
Other Entities May Require It
Even if the state or local government will let you slide on liability insurance, it does not mean you will not need it.
Let's say you purchase a building for your business. Even if you may not ever see a customer at that location, the bank financing the purchase will often require liability insurance as a term of the loan. Let's say that you rent an office space. The landlord will often ask for proof of liability insurance before you sign the lease.
For businesses that work on other's property, the customer may insist that you carry liability coverage. In all of these cases, the insurance policy makes another activity possible for your business.
Cost of General Liability InsuranceSmall business owners rightly worry about their expenses growing beyond their ability to cover them. There is some good news on this front. Let's say you run a comparatively low-risk concern. Your average general liability insurance cost may run somewhere in the neighborhood of $400 to $500 a year. That could get you a cool $1 million in coverage. Your circumstances will play a role in general liability costs and total coverage. Do you get a lot of foot traffic? Your business runs more risk of customer slip or fall injuries. You might also opt for a higher premium and more overall coverage.
Going Beyond General Liability
For most businesses, a general liability policy is the bare-bones version of insurance. There are other types of policies that enhance or complement the standard liability insurance package.
Business Owners Policy (BOP)
A business owners policy typically packages together two types of insurance that most small businesses consider:
- General Liability Insurance
- Property Insurance
Where general liability may protect other people or their property, business property insurance may protect your property from damage or theft.
Covering Your Business
Unless you run a profoundly low-risk business, you may want to consider investing in some form of general liability policy. These policies could help you in many ways. They may protect you from lawsuits involving third-party property damage and customer injuries at your business.
A policy could help you secure a mortgage for a property or lease for an office. Knowing your business may be covered could even help reduce stress. Most general liability policies come at a fairly low cost, which may help to keep your expenses manageable.
If you want something more comprehensive, you can opt for a business owners policy that includes general liability coverage.
PolicySweet specializes in business owners’ policies. For more information or a quote contact PolicySweet today.