General liability insurance is one of the most essential types of insurance coverages you need to safeguard your business, whether you are a consultant, operate your own retail store, or work as a contractor or skilled tradesperson. Lawsuits filed against your company can have a negative impact on your bottom line as well as your reputation with your clients or consumers. Understanding the risks that your company faces and having the appropriate coverage to defend you from those risks is a critical step in protecting your operations.
What is liability?
In the case of small businesses, liability refers to your company’s legal responsibility for third-party losses. You are exposed to a multitude of liability concerns the moment you decide to establish your own business. In some cases, your company may not have done anything illegal, but you may nevertheless find yourself embroiled in a lawsuit. Having the correct insurance coverage can help you reduce the losses you incur as a result of liability claims.
So, what is general liability insurance?
General liability insurance protects the policyholder against the risks of liabilities resulting from litigation and other similar claims. Liability insurance policies are often established by insurance firms to give protection against third-party insurance claims. As a result, they pay claim compensation to a third party damaged by the insured rather than the policyholder.
When a third party is injured and files a claim, the insurance company has the legal authority to defend the policyholder.
A general liability policy is frequently used by insurers to cover public and product liability concerns. These risks often include bodily harm or property loss caused by the policy holder’s direct or indirect acts. The maximum amount payable by the insurer in the event of a liability claim is specified in these policies.
A general liability insurance policy, with the exception of automobile and professional liability, is a type of insurance policy that protects insured commercial enterprises from a wide range of liability risks.
General liability insurance pays for various expenses, such as:
- Property damage or injuries caused by the company’s owners or workers
- Legal expenses, such as the cost of the company’s legal defence, settlements, and awards if the company is sued.
- Non-monetary losses sustained by the injured party, compensatory damage, and punitive damages are all examples of damages.
- Tenant liabilities, such as property damage if the company uses a rented property
- Expenses incurred as a result of accusations involving misleading or fraudulent advertising, including slander, libel, and copyright infringement
- General liability insurance pays for medical expenses incurred by a client or customer if they slip and fall while visiting your business.
- It protects a customer’s house or property from harm caused by one of your employees.
Does my business need General Liability insurance?
- If you are found legally responsible for causing bodily harm or property damage to a third party, your firm may be required to pay the costs of the legal process as well as any financial losses incurred as a result of the litigation.
- Your reputation with your clients/customers could suffer greatly as a result. Consumers must have confidence in companies and brands they invest in. If handled improperly, a lawsuit could undermine that sense of trust.
- There are numerous instances in which you may be required to present proof of insurance. If your company attends events such as exhibitions or markets, the venue may frequently need attendees to present a certificate of liability coverage. Some customers will want confirmation of insurance if you are a contractor or skilled tradesperson before allowing you to work on their premises.
Many small business owners are unaware that they require liability insurance or believe it is extremely costly. The truth is that no matter how tiny your business is, even if you run it from your home, it is still vulnerable to numerous types of liability. In reality, the consequences of a liability claim can be disastrous for a small organisation. Every firm, at the very least, should have a standard general liability policy in place to protect their business from risk and loss.
What Types of Businesses Benefit from Commercial General Liability Insurance?
The types of businesses that typically use general liability insurance include Small business owners, Landscaping companies, IT contractors, Real estate agents, Consultants, Marketing firms, Janitorial services, Artisan contractors. It is an essential form of cover for almost every type of business, from trades and services industries to white-collar professionals and office-based occupations.
Who Should Buy General Liability Insurance?
Here are situations where you would benefit from general liability insurance coverage:
- Your business is open to the public, clients, and vendors.
- You advertise or generate marketing materials for your company.
- You use social media for personal or professional reasons.
- You conduct business at third-party locations.
- In order to be considered for job contracts, you must have insurance coverage.
- You have temporary workers.
We have over 25 years of experience in delivering the best possible insurance products to all kinds of businesses. Reach out to us and we can discuss what specific kind of insurance will your business best benefit from.