General Liability Insurance Policy & Cost for Small Business

Running a small business can be a lot of work. There are so many things to think about, from marketing and sales to operations and finance. One thing that you don’t want to forget is protecting your business with general liability insurance policy.

This type of policy can provide protection in the event that someone gets injured on your property or if you are sued for damages. In this blog post, we will discuss general liability insurance policies and how much they cost for small businesses.

Well, just like choosing the right insurance for your eCommerce business or buying insurance for an SEO agency, there are several different types of insurance coverage available for small businesses. 

However, general liability insurance is a common and perhaps the most important type of insurance policy for small businesses. 

General Liability Insurance for Small Business

What is General Liability Insurance Definition? 

General liability insurance protects your small business against claims of property damage or bodily injury to a third party. 

Often referred to as commercial general liability, or CGL in short, general liability insurance also covers legal costs stemming from an accident that occurred at your business. 

What Does General Liability Cover for Small Business? 

General liability insurance covers several different aspects of your small business such as:

General liability insurance claims are very common, and can take place during normal day-to-day small business operations. 

Even though general liability insurance is not required by law, many states mandate it for certain industries such as construction. 

Adding to this, it is highly likely that your mortgage company, clients, or landlord may require general liability insurance. 

Bodily injuries and property damage

For example, a customer walks into your store, and slips and falls, your general liability insurance will cover the cost of injury to others including medical expenses and legal costs. 

Furthermore, if you’re a handyman, you should ideally have specialized handyman insurance, but as a general contractor, you damage something at your client’s property, general liability insurance will pay for the costs of damage or repair. 

Copyright infringement

General liability insurance small business also extends to copyright infringement. In the event you use someone else’s work such as an image or video knowing or unknowingly, the original creator can sue you for copyright infringement. 

Advertising injury  

If your small business defames another person or company, they can take you to court for advertising injury. 

Reputational harm

If you make a claim against a company that was not true, and negatively impacts them, the other party can sue you for reputational harm. 

What Does General Liability Insurance Small Business Insurance Not Cover? 

General liability insurance offers coverage for several different areas of your business, but there are a few things that it does not cover. 

For some claims, you will need other types of insurances to give your small business added protection. 

Some of the things general liability insurance will not comer include:

Commercial auto accidents – if you or your employees get into an accident while driving at work, your general liability insurance will not cover the cost of damages, for which you will need a commercial auto insurance policy. 

Employee injury or illness – if you or your employee (s) fall sick or at injured at work, you will be covered under a general liability insurance policy, but can be covered under workers’ compensation insurance. 

In fact, in some states, it is mandatory to have worker’s compensation insurance such as California, even if they have just one employee. 

Damage to your own business of property – while general liability insurance will cover the cost of damage done to a 3rd party, it does not protect damages incurred to your own business property, for which you will have to buy commercial property insurance. 

Insurance for Small Business

What is the Cost of General Liability Insurance? 

The cost of general liability insurance for small businesses varies depending on a number of factors, such as the size of your business and the industry you are in. However, you can expect to pay somewhere between $500 and $5,000 per year for a policy.

Some of the factors that affect the cost of general liability insurance include:

-Business size: The larger the business, the higher the premium. This is because there is a greater chance that the business will be sued for a large amount of money.

-Type of business: Certain types of businesses are more likely to be sued than others. For example, businesses that provide professional services or that sell products to the public are more likely to be sued than businesses that provide services to other businesses.

-Location: Businesses located in areas with a higher risk of lawsuits, such as major cities, will generally pay more for their insurance than businesses located in less populated areas.

-Industry: Some industries, such as healthcare and construction, are more likely to be sued than others. As a result, businesses in these industries will usually pay more for their insurance.

The best way to get an accurate estimate of the cost of general liability insurance for your small business is to contact a licensed insurance agent or broker. They will be able to provide you with quotes from multiple insurers based on your specific business needs.

What is the difference between general liability and business owners’ policy?

Business owners’ policy (BOP) is a package policy that combines general liability insurance with property insurance, providing coverage for both common risks faced by small businesses.

General liability insurance covers third-party claims of bodily injury and property damage, as well as advertising and personal injury claims. It does not cover damages to your own property or business.

What is the difference between general liability and auto liability?

Auto liability insurance is designed to protect you from financial loss if you are involved in an accident and found to be at fault.

Public and product liability insurance vs general liability?

There are two types of liability insurance that small businesses should consider: public and product liability insurance, and general liability insurance. Public and product liability insurance covers your business if you’re sued for injuring someone or damaging their property. General liability insurance covers your business if you’re sued for any reason, including things like false advertising or breach of contract.

Final Thoughts 

Regardless of the size of your business, whether small or just starting out, you should buy a basic general liability insurance policy. 

If you operate a small business without a general liability insurance policy, the consequences can land you in a financial bind. 

Even though it is not mandatory in most states to have general liability insurance, if you are a smart business owner, it should be the first thing to buy on your list. 

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