Commercial General Liability Insurance Coverage Built For Your Business
At The Allen Thomas Group we know accidents happen, but with our general liability insurance options, you can be prepared for any unexpected mishaps. Our coverage offers peace of mind for you and your business.
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What is commercial general liability insurance?
Businesses can protect themselves from financial losses due to lawsuits and other liabilities by obtaining commercial general liability insurance. This insurance policy typically covers bodily injury, property damage, and personal and advertising injury claims. It is essential for businesses to carefully review their coverage options and ensure they have adequate protection in place to mitigate potential risks and liabilities.
In a worst case scenario? General Liability Coverage can be your saving grace
Imagine this: you’re celebrating the success of your growing business when a customer trips and falls in your store, resulting in an expensive lawsuit.
A seemingly minor incident like this could put your hard-earned accomplishments at risk.
General liability insurance is the safety net that secures your business from collapsing under the weight of unforeseen accidents and legal claims.
Don’t let Murphy’s Law – “whatever can go wrong, will go wrong” – devastate your entrepreneurial dreams. Dive into our in depth information and examples on this page to learn more on how general liability insurance provides essential protection to safeguard your business and its future.
General liability insurance is a type of business insurance that protects against claims of bodily injury, property damage, advertising injury, and other third-party liabilities. Any business – large or small – can be sued by a customer or client, so having general liability insurance can help mitigate the financial impact of a lawsuit.
Without adequate coverage, you could be responsible for paying damages, legal fees, and other costs out of pocket – potentially putting your business at risk. Working with a knowledgeable insurance agent can help you determine your specific needs and find the right policy to protect your business.
Table Of Contents
Understanding General Liability Insurance
You may have heard about general liability insurance or currently have this type of coverage as a business owner, but what exactly is it?
Simply put, general liability insurance protects your business from financial losses that could result from bodily injury or property damage caused by your employees or products/service offerings.
To illustrate, imagine owning a small bakery and one of your customer’s slips and falls on a wet floor. This customer filed a lawsuit against you for medical expenses and lost wages. General liability insurance would cover the legal costs of defending yourself in court and any potential settlement fees.
Another scenario could be if you are a contractor renovating someone’s home. A worker could damage the homeowner’s property while on the job site. In this case, the homeowner could sue for damages to their property.
Without general liability insurance, legal fees or damages would come out of your pocket.
The importance of having general liability insurance cannot be overstated.
According to a survey by The Hartford, more than 40% of small businesses will experience a general liability claim within the next ten years, with an average cost of $50,000 per claim.
That’s a significant amount of money that most small businesses cannot afford to pay out of pocket.
Some business owners might argue that they don’t need general liability insurance because their business is low-risk or their customers are friends/family who wouldn’t sue them.
However, accidents can happen to anyone at any time, and not having coverage puts your business at serious risk.
Think of general liability insurance like car insurance; you don’t necessarily expect to get into an accident when you get behind the wheel, but having coverage gives you peace of mind if something happens.
Now that we understand the importance of general liability insurance, let’s dive into the definition and purpose.
General liability insurance is crucial for protecting your business from financial losses caused by bodily injury or property damage.
It covers legal fees and potential settlement costs, adding up to thousands of dollars per claim.
Gathering More Details About General Liability Coverage
General liability insurance covers a variety of situations, such as bodily injury, property damage, advertising injury, and personal injury.
In addition to covering legal fees and settlement costs, general liability insurance also protects against any reputational damage caused by the incident.
For example, if a customer brings a lawsuit against your business for discrimination or slander, general liability insurance could pay for legal expenses and the cost of loss of income due to a damaged reputation.
The primary purpose of general liability insurance is to protect your business from financial ruin in the event of an accident or lawsuit.
As previously mentioned, a single claim could be enough to bankrupt a small business. With general liability insurance in place, you can rest assured that you have coverage to help pay for any costly legal fees or settlements.
To expand on this point, imagine that you are a contractor working at a construction site, and your employee accidentally damages an expensive piece of equipment another contractor owns. The owner of the equipment sues you for damages. Without general liability insurance, the cost of damages could exceed what your business can afford to pay.
It’s also worth noting that many contracts with vendors or partners may require proof of general liability insurance before doing business with you. This means having coverage not only protects your business from potential lawsuits but also ensures that you can conduct business with reputable companies.
Some might argue they don’t need general liability insurance because they have never had an accident or don’t work in high-risk industries. However, even low-risk sectors are not immune to accidents or lawsuits. For example, if someone were to trip and fall on your property and suffer injuries requiring medical attention, you could still be liable without coverage.
Think of it like wearing a seatbelt when driving; you don’t plan on getting into an accident, but you still put it on because it could save your life if something unexpected happens.
Now that we better understand the definition and purpose of general liability insurance, let’s move on to assessing your business needs.
General liability insurance is a type of business insurance that protects companies against claims made by third parties for bodily injuries or property damage caused by their operations.
The policy covers the cost of legal defense and any damages awarded up to the policy’s limits. In essence, general liability insurance allows businesses to transfer the financial risk of lawsuits to an insurance company.
Let’s take an example to demonstrate how it works. Imagine a customer who visits your store and slips on a wet floor, fracturing their ankle. They file a claim against your business for medical costs, lost wages, and pain and suffering. If you have general liability insurance, the policy will pay for your legal fees and any compensation awarded as a result of the claim (up to the policy’s limits).
Without this coverage, you would have to pay out of pocket!
It’s important to note that general liability insurance only covers claims made by third parties, not your employees or products/services.
For those types of risks, you may need additional coverage, such as workers’ compensation or professional liability insurance.
Generally, there are two types of coverage provided by general liability insurance: bodily injury and property damage.
- Bodily injury coverage applies to physical harm caused to someone else due to your business operations (such as in the slip-and-fall example above).
- Property damage coverage applies when your business causes damage to someone else’s property (such as if one of your employees accidentally starts a fire in a client’s building).
Additionally, general liability insurance can cover other types of claims, such as libel, slander, and advertising injury related to business operations.
For example, if your marketing campaign uses copyrighted material without permission and results in a lawsuit, general liability insurance may help cover the costs.
Think of general liability insurance as an umbrella shielding you from potential rainstorms.
Just like an umbrella protects you from getting wet, general liability insurance protects your business from financial damages caused by lawsuits.
Now that we’ve covered the basics of how general liability insurance works let’s move on to assessing your business needs.
Not all businesses need general liability insurance, but for some, it’s essential. Here are some factors to consider when deciding if your business needs this type of coverage:
Types of Businesses Need Coverage: Some businesses are more likely to face third-party claims than others.
For example, a construction company is more at risk for bodily injury claims than an accounting firm. You may be more vulnerable to lawsuits if you have a public-facing business or offer a physical product or service.
Let’s consider the case of a landscaping company. Their employees work with heavy machinery and sharp tools, which could lead to accidental customer injuries.
They may also damage property while working on clients’ lawns and gardens. In this case, general liability insurance would be necessary to protect against potential lawsuits.
Covered Exposures and Limits: It’s vital to assess what risks your business exposures and how much coverage you need to mitigate those risks. For example, suppose your business operates in an urban area with high foot traffic. In that case, you may need higher coverage limits than a similar business in a rural area with less traffic.
Continuing the example of the landscaping company, if they operate in a densely populated urban area with expensive real estate values, their policy limits should reflect these higher risks.
Ultimately, deciding whether to purchase general liability insurance depends on evaluating the specific needs and risks of your business operations.
Working with an experienced agent or broker like The Allen Thomas Group can help guide you through that process so that you can make informed decisions about protecting your business.
Now that we’ve covered how general liability insurance works and how to evaluate your business needs let’s explore types of businesses that need coverage and then we can dig into the costs and factors affecting pricing.
General liability insurance is a vital protective tool for many types of businesses.
Any business with a physical location that interacts with third parties in other areas or provides advice or services can benefit from this coverage. Here are some specific industries that may need general liability insurance:
Construction companies: Construction companies often have heavy machinery and employees working on job sites. There is always a risk of accidents, causing bodily injury or property damage to third parties. General liability insurance can help cover these claims and avoid costly lawsuits.
Professional service providers: Businesses that provide professional services, such as accounting firms, law firms, and consulting agencies, are exposed to liability risks associated with providing advice and expertise. Even minor errors or omissions on the part of the business can lead to devastating financial losses. General liability insurance offers protection in case of lawsuits arising out of these errors.
Food and beverage industry: Restaurants, bars, catering services, and food truck vendors all face risks related to food safety and sanitation issues. These businesses can be held liable for illnesses caused by their products or services, resulting in legal claims from customers. General liability insurance can protect these businesses from associated costs.
Retail stores: Accidents, including retail stores and shopping malls, can happen anywhere. These accidents may involve customers slipping on wet floors or tripping over merchandise displays. General liability insurance ensures that these businesses won’t suffer financially from these unexpected events more than necessary.
Sole proprietors: A sole proprietorship is a business structure where one person owns and runs the company. Depending on the nature of the business and the size of its operations, a sole proprietor may not need general liability insurance since they operate on a smaller scale.
However, if the sole proprietorship regularly involves interactions with third parties, it may be wise to obtain general liability insurance to protect against liability claims.
General liability insurance covers several areas of business risk, including bodily injury, property damage, personal and advertising injury, and medical payments. Here are the details of what is covered:
Bodily Injury: When someone is injured on a business’s property due to negligence or a fault that can be traced back to the company, general liability insurance can help cover related medical expenses. Furthermore, if an injured party decides to sue the company, this policy may cover associated legal fees.
Property Damage: In case of any property damage incurred by third parties due to negligence or wrongful actions by a business, this type of insurance will cover the damages. This includes damage caused when employees work on third-party property or during the transportation of goods.
Personal and Advertising Injury: This covers issues like slander and libel in advertisements and actual physical harm incurred as a result of those efforts, such as emotional distress. While it might not seem a significant issue for small businesses, larger companies can experience significant problems from perceived defamation (primarily through social media).
Medical Payments: Medical payment coverage ensures that anyone injured while on business premises can receive necessary medical care without it being an out-of-pocket cost for them. It usually doesn’t require a settlement or finding of fault – just an accident that occurred or was caused by the business when it happened.
Whether to avoid financial ruin or seek protection from lawsuits, general liability insurance is an important safeguard for your business.
General liability insurance is an essential investment for any business, but many business owners hesitate to purchase it because of the cost.
While the average cost of a general liability policy is between $500 and $1,500 per year, other factors can impact the cost depending on the size and type of your business.
For example, if you run a home-based daycare, you’ll likely pay less than a construction company with multiple employees.
This is because the risks associated with each type of business are different. Small businesses that pose less risk will naturally pay less for insurance coverage.
Factors That Contribute To Costs of Insurance Coverage
Other factors that can contribute to the cost or savings for your coverage include:
– Business revenue: Your insurance premium may be based on your revenue, as more revenues usually indicate higher risk.
– Coverage limits: The higher the liability coverage limits in your policy, the more you’ll pay in premiums.
– Deductible: The amount you must pay out-of-pocket before insurance kicks in can also affect costs.
– Business Location: If you operate in an area prone to natural disasters or high crime levels, you may pay more for coverage.
– Industry-specific considerations: Some industries face more risks than others. For example, a contractor who uses heavy machinery and works at heights will likely have higher premiums due to perceived liability.
It’s crucial to remember that while general liability insurance may seem costly, not having it could be even more expensive.
With the average cost of claims around $50,000 per claim, not having adequate coverage could leave your business in financial ruin.
Now that we’ve explored pricing and other factors affecting costs let’s move on to choosing the right insurance provider. Of course we will be a little biased on this 🙂 but we do offer some crucial insights.
Choosing the right insurance provider is as important as selecting the right coverage level and policy terms.
You need an experienced and knowledgeable provider offering products that cater specifically to your industry and offer fair prices.
As you search for providers and compare their offerings, try to understand how well they understand your business needs.
Here are some good questions to ask:
Do they offer customized coverage plans that fit your unique situation? Do they have experience insuring businesses like yours?
We can’t stress this next point enough!
Some business owners may be tempted to choose the cheapest insurance option available, but this isn’t always the smartest choice.
We have multiple business owners come to us daily because they bought an insurance policy only on cost factors, and now, as they try to scale their business, they realize that that policy can’t scale with them.
While it’s understandable that you want to save on insurance costs, you must also consider other factors.
For example, does the policy have adequate coverage limits to protect you in case of significant liabilities? Is there a high deductible? Are there exclusions or limitations in the policy?
Choosing an insurance provider is similar to selecting any other type of business partner or vendor.
You want someone who understands your needs, can provide reliable service, and has a good reputation within your industry.
Consider speaking to other business owners in your network about their experiences with different providers. Also, check out online reviews from reputable sources like the Better Business Bureau or Google.
Finding the right policy and provider takes time and effort, but it’s an essential investment that will pay off in the long run if disaster strikes.
You can find comprehensive coverage at a competitive price point by working with an experienced commercial agent from The Allen Thomas Group who understands your needs and risk factors.
Frequently Asked Questions
General liability insurance covers a variety of claims that can arise when running a business. This includes bodily injury, property damage, personal injury, and advertising injury.
For instance, if someone slips and falls in your store, they could sue for medical bills and other related expenses. If you accidentally damage someone’s property while on the job, such as spilling coffee on their laptop, general liability insurance can help pay for the repair or replacement costs.
According to a survey by The Hartford, small businesses face an average of $30,000 in damages from unexpected events yearly.
Another study by Hiscox found that 40% of small businesses will experience a property or general liability claim in the next ten years.
General liability insurance not only helps protect your business financially, but it also shows customers that you take their safety and well-being seriously.
It could give them peace of mind knowing that they wouldn’t be left holding the bill if something happened.
Overall, general liability insurance protects your business from potential lawsuits and financial ruin. It covers a wide range of scenarios that could occur while running your business and keeps you prepared for anything life throws your way.
General liability insurance is a must-have for any business, regardless of its size or type.
In particular, high-risk industries should consider investing in this coverage.
Industries such as construction, healthcare, accounting, real estate, and manufacturing are particularly prone to lawsuits, and general liability insurance can help protect these businesses against expensive litigation costs.
According to Insurance Journal, the average cost of a liability claim back in 2015 averaged around $15,000.
While this may seem manageable at first glance, many claims can quickly escalate into six- or even seven-figure settlements. This means that businesses without proper insurance coverage could face significant financial losses if they are sued.
Furthermore, it is important to remember that accidents can happen to anyone at any time. Even if your business is not considered high-risk, you never know when a customer or employee might get injured on your premises or when your product might cause harm to someone.
On top of legal fees and settlements, the costs associated with medical bills and lost wages can add up quickly.
In short, any business that wants to protect itself from financial ruin should consider getting general liability insurance.
It provides essential protection against unforeseeable events and gives business owners peace of mind to focus on growing their business rather than worrying about liabilities.
Yes, there are industry-specific risks that general liability insurance may not cover.
While general liability insurance provides broad protection for businesses against common risks and hazards, specific industries may face unique or specialized liabilities that require additional insurance coverage.
For instance, malpractice lawsuits and data breaches can lead to substantial financial losses in the healthcare industry.
However, these risks are not typically covered under general liability insurance policies.
Therefore, many healthcare providers purchase specialized medical malpractice insurance and cybersecurity insurance to protect against these specific perils.
Similarly, construction companies face inherent risks, such as property damage, bodily injury, and defective workmanship, that may not be fully covered under a standard general liability policy.
In this case, purchasing a builders’ risk insurance policy or contractors’ errors and omissions insurance can provide added protection for these unique risks.
According to a National Association of Insurance Commissioners (NAIC) survey, roughly two-thirds of small business owners believe they have sufficient coverage with only a general liability policy.
However, failing to recognize and address industry-specific risks can leave businesses vulnerable to losses that could cripple their operations.
So while general liability insurance is essential to any business’s risk management strategy, it may not fully protect against industry-specific liabilities. Business owners should carefully assess their operations and seek specialized coverage to ensure comprehensive protection.
Who needs general liability insurance? Every business owner does!
General liability insurance covers a range of potential mishaps that can occur when running a business, from bodily injury to property damage and even defamation lawsuits. These incidents can happen anytime and without warning, leaving businesses unprotected and vulnerable to financial ruin.
Not having general liability insurance can hurt your business in several ways.
For example, if you do not have coverage and someone sues your company for damages or injuries, you may be forced to pay out of pocket. Sometimes, this could be enough to put your company out of business altogether.
So, whether you’re just starting out or have been in business for years, investing in general liability insurance for your protection and peace of mind is essential.
Don’t wait until it’s too late – contact an insurance agent today to learn more about how you can safeguard your business with general liability insurance.
The cost of general liability insurance can vary greatly depending on the size and type of your business and the level of coverage you require.
According to recent studies, the average cost of a general liability policy for small businesses in the United States is around $500 per year.
However, this number can fluctuate significantly based on factors such as industry risk, location, and coverage limits.
It’s essential to note that attempting to operate without general liability insurance can be a risky move that leaves you open to significant financial losses if an incident occurs. In some cases, lawsuits stemming from accidents or damages caused by your business can quickly reach into millions of dollars.
Therefore, it’s always worth investing in a quality general liability insurance policy to protect your business’s financial future.
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Working with an Experienced Commercial Insurance Agent From The Allen Thomas Group
You don’t have to settle for DIY insurance research when you can have a pro on your side!
Working with an insurance agent from The Allen Thomas Group can give you the edge you need to find the perfect policy for your business.
Our experts know the ins and outs of insurance policies and can help you identify potential risks specific to your industry. Plus, they can advise you on coverage limits and extensions that could benefit your business in the long term.
Don’t let concerns over added costs hold you back. The experience and knowledge of our agents can ultimately save you money by preventing costly gaps in coverage that could lead to lawsuits.
Some business owners worry that working with an agent or broker means giving up control over the insurance selection process.
Don’t sweat it! You’re still the boss. The role of our commercial insurance professionals is to provide information and guidance to help you make an informed decision about your policy. It’s like having a trusted advisor on your team.
With their expertise, you’ll feel confident in choosing a policy that provides comprehensive protection, with the best carriers, at a fair price.
At The Allen Thomas Group, we don’t just duct tape together a bunch of different insurance policies and call it a day. We build comprehensive insurance solutions that scale as your business grows.
We’ll help you customize a plan for general liability insurance that meets your unique needs, so you can focus on what you do best. Don’t settle for less than the best. Let us help you protect your business from lawsuits and damages that could be financially devastating.
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