With many different business insurance policies available on the market, it can be tricky for a small business owner who is not an expert in the insurance field to navigate their way through the different options to decide which ones they need and what is most suitable for their business.
General Liability insurance, also known as Business Liability Insurance or Commercial Liability Insurance, is one of the most commonly purchased types of business insurance. It is a mandatory requirement for most types of business and should be one of your first considerations as you are starting out.
If you're a business, entrepreneur or contractor that deals with anyone other than your staff or operates from a premises that is not your own, you will probably need some form of General Liability coverage as it protects your business from third party claims of bodily injury and property damage.
If you are a contractor carrying out work for another company, they may well require you to have General Liability coverage.
General Liability insurance covers you against 'third-party lawsuits' brought against you by anyone who is a third-party. It doesn’t cover employees and contractors of your business, who are generally covered by Workers Compensation insurance.
Coverage includes:
Injuries and accidents on your premises: For example, a client tripping over something at your office or a display stand falling on a customer in your shop.
Property damage: If you or your employees cause damage to anything belonging to someone else, such as a client's laptop getting water on it at your offices.
Non-physical personal injury: If someone (customer, client, competitor) takes you to court for damages to their reputation, copyright infringement, false advertising, etc.
General Liability insurance will cover legal costs, medical costs, and repair costs associated with the claim.
General Liability covers the owner(s) of a business as well as others associated with the business when representing the business. These include employees and volunteers. For corporations, it also includes executive officers and shareholders. The policy can also include subsidiary organizations and those contracted to carry out work for your business.
General Liability Insurance will not cover any of the following:
General Liability coverage is priced according to your type of business and perceived risks associated with the business.
For example, a construction business will generally have higher premiums than a company that designs websites. The costs for a small business often range between $750 and $2000, and your policy will outline the limits of coverage. You can increase your coverage limits when purchasing the policy, or by getting Umbrella insurance as well.
If your business is fairly low-risk, you could consider taking out a Business Owner's Policy (BOP) which is a cost-effective combination of General Liability and Commercial Property coverages.
You can find out more about General Liability insurance and get a free quote here.