07/21/2021
Small Business General Liability Insurance: What You Need to Know
News / By Ronnie Davis
As a business owner, you have a number of responsibilities to attend to every day, and undoubtedly you give it your all. Unfortunately, even if you pour every bit of your time and energy into running a small business perfectly, the unexpected will still happen sometimes. An insurance policy for your small business is your protection against those unexpected situations. Small business general liability insurance is one of the most important types of coverage that you can get because it covers situations that could potentially bring considerable damage to your business. It’s important to know how small business general liability can help you in your business today.
What Is The Main Purpose Of General Liability Policies?
The main purpose of this type of policy is the management of risk. By owning a business, you automatically expose yourself to potential legal action from people you work with, from the people your company serves, and, in fact, from any of the people you come in contact with. If a person is injured or suffers any kind of damage because of you or an employee acting on your behalf, they are likely to take legal action against the company. One lawsuit against your small business could mean the end of your company if the person suing you wins their case, so this is simply an unacceptable risk to expose yourself to. The liability policy will reduce your company’s personal risk by paying for necessary legal help when a lawsuit is filed, as well as paying the injured person if they win the lawsuit.
What Does Small Business General Liability Insurance Include?
The exact coverage of a small business general liability insurance policy can vary from one insurance policy to another, however, most general liability policies include three basic types of coverage against financial loss. These include:
• Bodily Injury: Bodily injury cases may be filed when a person is injured while on your business property, when someone becomes ill on your business property, or when a person contracts a disease because of your business. Bodily injury coverage usually also includes wrongful death cases. A wrongful death claim against your company could be filed by the survivors of an individual who died on your property or due to your company’s actions. Bodily injury can be not only physical, but also mental or emotional, in origin.
• Property Damage: Property damage cases may be filed when you or your employees cause property damage to another person’s property.
• Personal Or Advertising Derived Injury: Some lawsuits against your company may be filed when your company causes any type of damages due to statements or advertising. This can include libel, slander, and a number of other situations in which verbal statements or printed ads for the company cause damage.
Is General Liability Insurance Required By Law?
In many states, general liability coverage is required by law. While there are some areas that may not legally require this type of coverage for business owners, bear in mind that virtually all mortgage providers also require business liability coverage. In fact, a small business liability policy is usually listed as a condition of the loan when you sign the mortgage papers.
How Can You Help Limit Liability As A Small Business Owner?
The best way to limit your liability as a small business owner is to get a good general liability policy, so you are protected financially when lawsuits come up. To help prevent your business from having to deal with legal actions, you can also do some other things to help prevent liability issues.
• Making The Workplace Safer: Make sure that you have the safest possible workplace, one that complies with all state and federal safety standards. If your employees are working with any type of hazardous materials, or if they work in any potentially dangerous environment, be sure that they are supplied with property protective equipment and clothing.
• Posting Procedures and Rules: If you post a list of all proper procedures and rules, your employees and visitors to your property will not be able to claim that you didn’t adequately inform them of the proper safety rules and regulations. If possible, get your employees to read and sign a list of safety procedures and rules before they work in any situation that could potentially cause injury.
• Maintain Your Property: Your work property should be properly maintained at all times. This includes the parking lot, the walkways, the building floor, the building roof, and any equipment that is permanently installed on the business property. When your property is maintained well, the chances of bodily injury lawsuits can be significantly reduced.
What Other Coverage Do Business Owners Need?
Generally, commercial liability insurance policies are actually only one part of a full coverage insurance plan for business owners. Most small business owners will also want to have property coverage, which will cover damage to your work premises. Property coverage will usually include most major types of damage, for example fire damage and storm damages.
Your property damage policy will often cover both the property and the contents of the buildings, but you should check with your agent to determine exactly what your policy covers.
