If you operate a small business, a big question that probably crops up often in your mind is what insurance do I need?
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 coverages available for small businesses.
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General Liability Insurance ->
Professional Liability ->
Commercial Auto ->
Workers Compensation ->
Commercial Property ->
Other Business Insurance ->
However, general liability insurance is a common and perhaps the most important type of insurance policy for small businesses.
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.
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.
If your small business defames another person or company, they can take you to court for advertising injury.
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.
What is the Cost of General Liability Insurance?
If you are wondering what is general liability small business insurance cost, it varies and depends on several different factors.
Some of these factors include the type of small business, and policy limits. But to give you a rough idea, general liability small business cost starts at $40 per month and $600 annually.
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.