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- 5 Benefits of General Liability Insurance Every Business Owner Should Know
It’s a sad reality that most small businesses today remain unprotected from liability claims and lawsuits. If you happen to own a small business that doesn’t have a general liability policy, you might be just one lawsuit away from closing down.
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According to the U.S. Chamber of Commerce, small businesses lose more than $100 billion each year as caused by legal issues. The reason for that ridiculous amount of money lost is due to the prevalence of frivolous lawsuits filed against small businesses. And because most of them are still unprotected by a general liability policy, they would have no choice but to empty their pockets. The National Federation for Independent Business reveals that small businesses pay about $35 billion from their own personal finances each year to settle legal claims.
In our litigious society, it’s important to purchase general liability insurance. Here’s what you need to know.
General Liability Insurance Defined
Given its name, general liability insurance will help protect you and your business from “general” or non-employee claims. These claims may involve bodily injuries, damage to property and personal or advertising injuries among many others that may arise from your day-to-day business operations.
Why You Need It
If you’re wondering how general liability insurance can help your business, think of it this way. You are the owner of a small restaurant business functioning on a day-to-day basis and by some unfortunate circumstances, one of your patrons suddenly flipped over his chair and injured himself.
No matter how little the injury may be or whether or not it was actually the patron’s fault, the fact that it occurred within your business operations makes you liable and vulnerable to a lawsuit. Should the patron decide to press charges, it would definitely help if you are protected by a general liability policy.
If you’re worried about the costs of getting general liability insurance, it actually doesn’t cost that much as CostFigures said that the average monthly premium typically ranges from $37 to $115 depending on the type of business.
Another reason to have the correct insurance in place is when applying for funding. Our blog breaks down why you need to have certain policies in place: Why Businesses May Need Insurance When They Apply For a Loan. An SBA loan with low rates, long terms and very low payments has specific insurance requirements you need to have in place if applicable to your business. Review our check list of insurance policies here to learn about insurance like flood insurance, life insurance, workman’s comp and more: Insurance Required to Obtain an SBA Loan
Benefits You Can Get from It
When you acquire general liability insurance, sometimes referred to as “business liability insurance,” it will automatically cover the immediate costs of medical expenses, attorney fees, court costs, settlements, witness fees, and court-ordered judgments.
Protection for your business is the biggest perk you can get from general liability insurance. Usually, when you avail of such insurance, the following claims would be covered.
Property Damage Coverage
This is highly relevant if someone else’s property gets damaged during your business operations. This insurance will extend its coverage to both real and personal properties.
A good example of this is when you are out making deliveries and you unexpectedly crash into another person’s vehicle, fence or even a tree.
Bodily Injury Coverage
As mentioned above, general liability insurance bodily injuries to third-party individuals during business operations. Remember that this applies only to non-employee injuries caused by your operations, facilities and your employees themselves.
Employees harmed during business operations are not covered by this type of insurance.
Products and Completed Operations Coverage
If you deal in selling products, remember that your goods can also cause harm to your customers either through injury or illness. If you happen to have a customer who finds himself ill after consuming your product, you’ll be protected by general liability coverage.
If your business is all about rendering services and you find yourself receiving complaints regarding the work you had completed for a client, know that the same protections apply to you.
Personal Injury Coverage
Personal injury could either be intentional or through negligence which could lead to the harm of another individual or entity. This could be the result of unintentional defamation or even reckless conduct.
Advertising Injury Coverage
This claim is highly similar to personal injury in a way that it occurs while advertising your business. You may have let a few choice words slip while advertising your products or services causing damage to another individual or entity’s image and finances.
In addition to general liability insurance, there are other policies that protect your business. Learn why you might need flood insurance, commercial vehicle insurance or business interruption insurance here: Types of Insurance Every Small Business Needs
About the Author
This content was contributed by AJ Henry.