Who Needs General Liability Insurance?
General liability insurance is a common commercial policy designed to protect businesses against claims regarding bodily injury and property damage. This insurance is crucial for any business that wishes to operate, especially those that interact with or provide a service to the public.
Why Businesses Need General Liability Insurance
Many businesses go under due to expensive lawsuits. This is especially true for small businesses that don’t have savings to fall back on. Lawsuits of bodily injury and property damage are common across industries, and businessowners must do what they can to protect their assets against such claims.
In some industries and professions, general liability insurance is required to obtain a license or purchase property.
What General Liability Insurance Covers
General liability insurance covers three main areas: bodily injury, property damage and personal or advertising injury. This insurance can provide compensation for a victim who suffers bodily injury on the business property and property damage that occurs during normal business operations.
Personal or advertising injury refers to claims regarding libel, slander, copyright infringement, wrongful arrest and more. This type of claim generally comes from competitors, but it can also come from clients and other third parties.
All of these coverages provide compensation to the business for legal expenses such as court fees, defense costs and settlement expenses.
How Much is General Liability Insurance?
On its own, general liability insurance is relatively inexpensive, although it depends on a variety of factors. Factors that may affect the cost of your business’ general liability insurance include:
Size of the business
General liability insurance typically offers between $1 million and $5 million in coverage, although more coverage may be added. Businesses that face a large amount of liability risk may add an umbrella liability policy. An umbrella liability insurance policy covers liability expenses after your original policy reaches its limits. For example, if your policy covers $1 million and your business is sued for $2 million, an umbrella liability insurance policy will step in to pay the remaining $2 million.
Most businesses pay around $42 a month for a general liability insurance policy. Small businesses may choose to bundle their general liability insurance into a business owners policy (BOP) in order to save money. A business owners policy combines general liability and commercial property insurance into a customizable policy that allows business owners to combine coverages for a lower price.