What is General Liability Insurance and How to Get It

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Humans make mistakes. Some mistakes are big, some are small, and some are catastrophic. But, while humans can forgive them, an error in a big business decision might not be so forgiving in financial terms. 

A wrong PR campaign or a billboard falling and causing injury to a bystander can incur all kinds of lawsuits. 

If you think these accidents are unlikely for a small business, Insureon’s study should change your mind. According to them, one in three small companies faced top hazards in the previous years.

So what should a small business (or any business for that matter) do?

Simple, get general liability insurance or professional liability insurance!

But what exactly are general insurance and professional liability insurance? Which one’s right for you? Is it going to benefit you? And lastly, how do you get one?

This article will answer all those questions and more.

Summary

General Liability Insurance, also known as Commercial General Liability or Business Liability, is a policy that provides financial protection if you or your business are held accountable for common accidents occurring at your business, such as a customer getting injured. It also includes coverage for defamation by clients.

What it covers:

  • Injuries to people on-premises
  • Damage to someone else’s property
  • Libel or slander accusations

What it doesn’t cover:

  • Work-related injuries or illnesses sustained by employees
  • Damage to your business property
  • Mistakes made in your business’ professional services

Cost of General Liability Insurance Policy:

It costs about $42 per month based on the average cost of policies from popular insurance providers.

How to get General Liability Insurance:

Compare the prices of GLI providers online using STP brokerage that compares and provides the best-priced insurance for your business needs.

Types of Liability Insurance

Before you learn what general liability insurance is and how to get it, you must know that there are three main types of liability insurance coverage:

 

  • Professional liability
  • Employer liability
  • General liability

Professional Liability

Professional liability insurance (PL), or errors and omissions insurance (E&O), covers claims of errors by your business in the services provided. For instance, if you run a marketing campaign for a company and an error causes them to lose finances, professional liability insurance will cover your legal team’s cost. 

Professional liability also covers:

 

  • Misrepresentation
  • Violation of good faith and fair dealing
  • Negligence

Most businesses providing customer services will require professional liability insurance for protection.

Employer Liability

A professional liability does not cover employees from work-related injuries or illnesses. For that, your business needs workers’ compensation insurance.

 

It will benefit your employees if they get injured or sick because of their job.

 

Depending on your location, you may be required to buy workers’ comp coverage for your employees if you run a business. Even if it’s not the law, it’s a good idea to get this coverage, as it covers:

 

  • Cost of medical care for employees that get hurt because of their job
  • Protect your business from a lawsuit due to the injury or illness of an employee

What is a General Liability Insurance?

Components of General liability Insurance

General Liability Insurance is a policy that can provide financial protection if you are held accountable for common accidents at a business, such as a customer getting injured. It also provides coverage if you are forced to defend defamation from unhappy customers.

It covers risks no matter what industry your business is a part of. It’s also the most popular choice for small businesses and self-employed professionals. Typically, it’s the first policy purchased by a new business.

You can choose to get GLI as a single policy or bundle it with other critical coverages, such as a Business Owner’s Policy.

It’s important to mention that general liability insurance doesn’t cover damage to your business property or your employee’s property. However, commercial property insurance can cover those claims.

What it Covers

What a general liability insurance covers

General liability insurance helps cover costly claims that can crop up without warning during a regular day of business operations. Not being covered means you would have to cover these costs out of your pocket. Unfortunately, not many businesses have the resources to do that.

It also protects policyholders from unpredicted expenses related to many common accidents that can affect your business negatively and lead to lawsuits:

  • Injuries to people on-premises
  • Damage to someone else’s property
  • Libel or slander accusations

Other third-party claims against your business that are covered include:

 

Third-party physical injury: A customer can sue your business for getting hurt by slipping and falling on your store’s staircase. Since your insurance policy includes bodily injury liability coverage, it can help pay for medical bills.

 

Third-party property damage: If you or your employees work at a customer’s house, your business risks causing damage to their property. Property damage liability coverage covers repair or replacement costs in such an event.

 

Reputation harm: Someone can sue your business for accusations of copyright infringement. General liability insurance helps bear the legal costs to defend your business if this happens.

 

Advertising injury: Your business can get sued for publishing an ad that belittles another company, damaging its reputation. General liability insurance automatically covers most advertising injuries.

What it Doesn’t Cover 

General liability insurance doesn’t cover every claim. For instance, it doesn’t help your business deal with claims of:

Work-related injuries or illnesses sustained by employees

 Workers’ compensation insurance covers such an event. This insurance helps pay for medical expenses and other costs your business would otherwise incur.

Damage to your business property

Though general liability insurance covers third-party property damage, it doesn’t cover damage to your business property. However, commercial property insurance can help cover damages to your business property.

Mistakes made in your business’ professional services

As mentioned earlier, professional liability insurance covers your business’s professional services.  A General Liability Insurance policy doesn’t cover claims regarding your professional services.

Other instances where a GLI doesn’t cover your business are:

  • Employment conflicts
  • Damage to business vehicles
  • Medical expenses related to automobile accidents
  • Professional errors & omissions 
  • Cyberattacks or identity theft
  • Business interruptions caused by a natural disaster
  • Business interruptions caused by employee sickness

How are General Liability Insurance and Professional Liability Insurance different?

As a business owner, figuring out which liability insurance you need can be daunting. The right policies depend on the kinds of risks your company encounters.

 

Both big and small businesses face liability risks, but the type of liability can vary based on what you do. For example, a contractor may be liable if their construction injures someone, whereas a consultation might be liable if a client faces financial losses due to their advice.

 

Both of these situations can lead to a lawsuit. But it’s also where general liability insurance and professional liability insurance differ.

 

General and professional liability insurance differ in the types of risks each cover. 

General liability covers physical risks, like in the case of construction injuries. Professional liability covers abstract risks, such as service errors and omissions, as a consultancy could.

How General Liability Insurance Saves Your Small Business

Business insurance has many choices, and some are necessary by law under specific measures.

Business insurance can be expensive. However, it can save hundreds of thousands of dollars if disaster strikes unannounced. And in most cases, they do.

Small businesses or startups often work on a tight budget. As a result, buying insurance that isn’t mandatory by law might seem unnecessary. 

A survey by Next Insurance of 30,000 business owners found that 44% of responding businesses have never had insurance.

As a result, taking that risk could cost your business far more than a monthly premium would. For instance, Insureon says that if a customer slips and falls on your property, injuring themselves, it can cost your business up to $20,000 for the lawsuit settlement.

Factors Affecting General Liability Insurance Cost

Factors affecting general liability insurance

General liability insurance cost is based on the following factors:

  • How much coverage is required
  • Number of employees being covered
  • Risk exposure: If your business is in a high-risk industry, the general liability insurance cost is higher
  • Location: Populated area can increase the risk of claims, which can impact the cost of your GLI
  • Years in business: Startups or small businesses don’t have as much experience as corporations, which can increase insurance rates
  • Type of business: A risk-prone company can increase costs due to the increased likeliness of filing claims
  • Coverage limits: The policy limit amount and deductible picked can affect insurance costs
  • Claims history: A clean record portrays safer risk management strategies to prevent bodily injury, lowering your small business insurance cost.

How Much Does a General Liability Insurance Cost?

General liability insurance usually costs $30 a month or less, based on a study on 50,000 small businesses by Hiscox. They also claim that 95% of small business owners pay less than $50 per month for general liability insurance, and only 1% of small businesses pay more than $100 per month.

We can guarantee a much better rate for your General Liability Insurance through STP Brokerage.

Which General Liability Insurance Is Right for You and How to Get It

Every Insurance provider boasts about having the most affordable pricing. 

However, you never truly know which one is cut out for your needs. That’s why you need to compare their quotes. 

This can be daunting, but with our comparative quote, you can effectively compare multiple insurance providers online and get the best price within seconds!

 

Even though every business is unique, every business can benefit from general liability coverage. Customize your policy to fit your business needs, so you get the range that is right for your business.

Still in Doubt?

Backed by more than 25 years of experience and testimonials from many small business owners, we can assure you you’re in safe hands. Whether you’re looking for information, want to understand our general liability covers, need a quote, or need help going through the claims process, our insurance experts are here to help. 

 

Get a general liability insurance quote today and discover how we can help cover you, your business, and your employees.

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What is General Liability Insurance and How to Get It

General Liability Insurance, also known as Business Liability, is a policy that provides financial protection if you or your business are held accountable for common accidents occurring at your business, such as a customer getting injured. It also includes coverage for defamation by clients.