Alternate names: Comprehensive general liability insurance, commercial general liability insurance
General liability insurance, or commercial general liability insurance, protects small businesses from a number of claims that can cause significant expenses, such as claims of property damage, bodily injury, or personal injury from libel or slander.
Example of General Liability Insurance
To illustrate how general liability insurance works, say you purchased a policy that costs $88 per month. As long as you make those payments on time, the coverage is in effect. Then, if your customer sues you for, say, medical expenses as a result of bodily injury while they are on your property, your general liability insurance will likely cover costs related to that claim up to your coverage limits. This way, your business will not have to pay for all the medical expenses and related costs out-of-pocket.
How To Get General Liability Insurance
Small business owners can get general liability insurance through a business owner’s policy (BOP), which combines different types of insurance in one policy. In addition to general liability insurance, it may also include commercial property insurance and business income insurance.
Commercial property insurance covers risks to business-owned or rented buildings, inventory and equipment. Business income insurance (business interruption insurance) provides f7unds to pay business bills and employees’ salaries if your business must temporarily close due to a disaster.
Some BOPs also provide crime insurance, which protects businesses from losses resulting from embezzlement, theft, fraud, or forgery.
Another option for buying business comprehensive insurance is through a commercial package policy (CPP), which, like a BOP, provides a variety of coverage, including commercial property, commercial crime, and commercial general liability. In contrast to BOPs, CPPs offer a custom mix of coverage to address specific risks and needs.
Other Types of Insurance for Small Businesses
Some other insurance coverage options small businesses should consider are workers’ compensation, commercial auto, and professional liability.
Workers’ compensation insurance: Employee work-related accidents, illnesses, or deaths can be costly for a small business. Having the proper workers’ compensation insurance coverage can address this risk. In fact, insurance coverage for medical costs and lost wages for workers who are injured or become ill on the job is mandated by most states. If an owner does not have this coverage, they will be held liable for the associated costs and could be fined or penalized by the state. Commercial auto insurance: If your business uses a vehicle as part of business operations, consider purchasing a commercial auto insurance policy. This policy covers both damages to the vehicle(s) and liability should you or your employee be found at fault for an accident. Professional liability insurance: Small business owners and service providers, such as contractors and freelancers, need to protect themselves from the costs of potential litigation stemming from their client’s claims of professional negligence, errors, or omissions. This insurance would cover the policy owner’s legal expenses and any judgments.
