If you’re a small business owner, getting your general liability policy, whether it’s your first or looking for better coverage, is usually necessary for smooth day-to-day operations. Many landlords, clients, and vendors require small businesses they work with to have general liability, so it’s not exactly an optional expense.
It’s an investment in the future of your business, protecting you from costly claims. However, there’s a lot of information about what a general liability policy is, what it covers, and how much you should pay for your general liability insurance.
Today, we’re simplifying the insurance process by telling you everything you need to know about a general liability policy. Let’s answer your cost and coverage questions so you can get a perfect policy for your business needs.
General liability insurance for small businesses is considered a foundational policy. It covers damages to third-party property, injuries to third parties, legal fees and settlements, and costs associated with third-party accusations of libel and slander.
Imagine that you own a bookstore, and you ship a large order of books to a customer. However, you accidentally leave your boxcutter inside the box, and the customer opens their order and cuts their hand. Even though this was a complete accident, the customer sues you since they were injured opening a shipment from you. Now, you have to cover any legal fees, medical fees for the customer, and settlement fees. You’re also facing potential reputational harm and loss of business. t
With liability insurance, all of these costs are significantly reduced or entirely covered, depending on your policy, allowing you to operate as usual in much less time and focus on running your business.
Because general liability can cover so many situations, many small businesses get a good liability policy and stop there, thinking that’s all they’ll need if they aren’t a specialized business or don’t own equipment. However, that’s just not true in 2024.
Cyber insurance is a fantastic example of something every small business owner should invest in. If you store customer data and client IP or process payments on your computer, you risk losing clients and trust if you’re the victim of a cyberattack.
While general liability is essential and covers many situations small businesses can encounter, it doesn’t cover everything. If you’re a small business owner, we recommend asking about cyber and professional liability insurance to ensure the most comprehensive coverage possible.
Another critical thing to remember about general liability insurance is that it costs associated with damages to third parties.
While general liability has your back when it comes to avoiding the costs associated with being held liable for someone else’s injuries, property damage, or claims that you are promoting libel or slander against them or their business, it doesn’t go as far as to cover damages to your property or the cost of you being injured.
To build on our example from earlier, let’s imagine you own a bookstore and have a general liability insurance policy – but no other insurance. Your customer get a concussion when a book falls on their head. Thanks to your liability policy, the costs of their lawsuit against your bookstore and their medical expenses are covered.
However, you can’t catch a break: a book falls on your head two weeks later in another freak accident. You file a claim with your insurer to cover the lost profits resulting from you being home, but they come back and tell you general liability doesn’t cover this.
So, what does?
Workers’ compensation insurance can cover medical expenses and pay lost wages associated with injuries to your employees – including yourself – that occur at work.
Additionally, business property insurance can protect your brick-and-mortar store and any other property against damages caused by vandalism, fire, theft, or natural disaster.
While general liability doesn’t cover the cost of damage to your assets, it does protect your assets and your business from unexpected costs – and there are other insurance policies you can invest in to protect your property, your employees, and yourself.
One of the most common questions small business owners ask when preparing to buy is how much their general liability insurance policy will cost. The truth is, no one answer fits every business.
Cost and coverage limits are evaluated differently for different types of companies, and several factors are considered. If you have a business that primarily operates out of an office, your cost and coverage limits will be decided a little differently than how cost and coverage limits are decided for labor-based businesses, like contractors, roofers, or lawn care businesses.
Your insurer will consider gross income, risk exposure, and the number of employees, among other factors, which vary from business to business.
However, there are a few things you can look for when considering your policy options:
Considering these questions is a lot for any business owner to do alone, so we always recommend consulting one of our insurance experts at CoverHound for a second opinion when buying a general liability policy.
If you’re a small business owner looking for your next general liability policy, you don’t have to look any further than CoverHound. We’re an online insurance platform that provides fast, efficient, and accurate coverage to business owners everywhere – and you can do more than buy small business insurance with CoverHound.
We’ve also covered you with home, auto, and renters insurance. Invest in your future quickly and easily with the help of our seasoned insurance experts. Start coverage for your small business within 24 hours when you work with CoverHound. Take our five-minute quiz today and get your no-hassle quote in no time.
Insurance shopping simplified
Insurance shopping simplified
