Commercial general liability insurance is an essential part of any insurance plan. Why? General liability insurance is crucial in protecting your business.
If someone claims that your business caused them harm or loss and they take legal action against you, that action can cost your business plenty in defense costs and payments for damages.
First, What is Commercial General Liability Insurance?
Commercial general liability insurance, or business liability insurance, protects a business from just that: general claims. These general claims can include bodily injuries or property damage.
What Does General Liability Insurance Cover?
Commercial liability insurance, can help cover:
- Medical payments if another person or party is injured on your commercial property.*
- Property damage if your business or employees cause damage to another person’s property.
- Advertising injuries if your business is sued for copyright infringement in your advertisement.
- Bodily injury claims if someone is injured at the site of business.
- Reputational harm if you face a lawsuit for libel, malicious prosecution, slander, privacy, or wrongful eviction.
These risks can come up during normal business operations. For example, the average cost of a slip and fall claim is $20,000.Without general liability insurance coverage, a business would have to pay these costs out of pocket.
*General liability insurance doesn’t cover employee injuries. Business owners can use worker’s compensation insurance to help cover work-related injuries or illnesses.
What Does Commercial General Liability Insurance Not Cover?
Typically, business liability insurance does not cover:
- Employee’s work-related injuries or illnesses. To help cover employees’ medical bills or other costs, small business owners (SBOs) can use workers’ compensation insurance.
- Employment-related claims such as discrimination, sexual harassment, or wrongful termination. These kinds of claims can be covered under employment practices liability insurance (EPLI).
- Errors in professional services that your company provides to customers. For this, SBOs will need professional liability insurance.
Does Commercial General Liability Insurance Cover Theft?
General liability insurance won’t cover your business equipment or property against theft or damage. You need a commercial property insurance policy to cover these issues. However, it may be possible to bundle a commercial property policy with your business liability for a discount.
How Does General Liability Insurance Work?
To protect your business, general liability insurance policies must typically be in place when the incident occurs.
However, business liability policies can provide retroactive coverage after you stop paying premiums. This extended coverage can often be purchased for an additional cost when you select your policy.
What Businesses Need General Liability Insurance?
Business owners can benefit from the coverage of general liability insurance in many situations. For instance:
- Your business is open to the public or clients or vendors.
- You advertise or create marketing materials for your business.
- You use social media personally or professionally.
- You use third-party locations for business activities.
- You need insurance coverage in order to be considered for work contracts.
- You have temporary employees.
In particular, small business owners should consider investing in general liability insurance because it protects against common risks that can come up during normal operations.
These risks can be as simple as a customer walking onto property, slipping on a wet floor, and breaking their ankle. General liability insurance can help cover medical expenses for this individual.
What Determines My Insurance Cost?
The cost of your general liability insurance may depend on several factors including:
- Type of business
- Unique coverage needs, customized to your particular operations
- History of insurance claims
- The size of your business
Certain industries and jobs that are more dangerous or have a higher risk of lawsuits may have higher premiums. Larger companies or those with a history of multiple General Liability claims may pay more.
Is Commercial General Liability Insurance Required by Law?
Business liability insurance is not required by law. However, if a business owner fails to purchase coverage, they are leaving their business vulnerable to a variety of risks. Let’s take a look at some examples.
The Risks of Not Having General Liability Insurance
Not having general liability insurance puts your business at financial risk. Facing judgments, legal settlements and lawyer fees without the aid of business general liability insurance can be very expensive and even bankrupt a business.
How Do I Purchase General Liability Insurance in San Diego?
Apex brings the high-touch service proposition back to San Diego businesses and beyond.
At Apex Risk & Insurance Services, we want you to know and understand your options. We prioritize transparency and provide custom solutions to meet your insurance needs.
Then, read on to learn more about the difference between professional liability insurance and errors and omissions (E&O) insurance.