General liability insurance offers protection for your business against third-party claims. You can also combine it with a property policy in a business owners policy (BOP). General liability and professional liability are typically tax deductible.
Even the most careful businesses can end up facing a costly lawsuit. This is why it’s recommended that most businesses get general liability insurance. Find out more at Leading Insurance Outsourcing Company.
Coverage for third-party claims
Almost every business needs general liability insurance. It provides a financial safety net in case you are sued for causing bodily injury or property damage, or if someone sues you over slander, libel, copyright infringement, or invasion of privacy. Commercial general liability also covers the reasonable costs of defending you against the lawsuit, as well as any settlements or judgments awarded against your business.
A general liability policy often has an aggregate limit of up to $1 million for claims during a particular period, called the policy term. You can get this coverage as a standalone policy or combine it with other types of business insurance to create a comprehensive package.
Some businesses, including some professions and landlords require you to carry this type of business insurance as a condition of your lease or contract. You may also want to consider a business owners policy (BOP), which combines liability and property coverage into one. This is a popular choice for small businesses.
Coverage for property damage
As a business owner, your company is responsible for the property of customers and clients. If that property is damaged or lost, you might be sued for damages and could lose the ability to operate your business.
General liability insurance protects your company from the cost of paying for third-party property damage caused by your business. It covers things such as a customer’s clothing getting dirty while you’re washing it or if your employees accidentally break a client’s table.
This coverage also pays for medical expenses incurred by people (excluding employees) who are injured at your business. It can also cover legal costs if someone sues over libel, slander or copyright infringement by your business. General liability policies often feature a per-occurrence limit as well as an aggregate limit. If you reach your aggregate limit, the insurance carrier will not pay any further claims during the policy period, which is usually one year. A licensed agent can provide you with more information about the limits available.
Coverage for bodily injury
Liability coverage offers financial protection in the event that a third party is injured on your business property. For example, if a customer slips and falls on a freshly mopped floor, your policy will help cover their medical treatment and any resulting legal expenses. Commercial general liability policies are also often required by landlords and in some cases by clients before they’ll agree to do business with you.
Some policies include additional types of coverage, such as product liability or advertising injury (which protects against lawsuits alleging libel and slander). Others offer umbrella insurance, which increases the maximum payout on claims. Many small businesses add workers’ compensation insurance to their general liability policies to protect against employee injuries on the job. You may also need to obtain a commercial auto insurance policy and a business owners policy (BOP) to fully protect your business assets.
Coverage for advertising injury
This part of your commercial general liability policy insures against accusations of disparagement of goods, slander, copyright infringement, or invasion of privacy that are connected with your advertising efforts. It doesn’t cover companies that design websites, publish content for others, or develop ads and promotions for other businesses — these exposures are usually better served by dedicated professional liability policies or coverage through a business owners policy (BOP).
Personal and advertising injury claims do not protect against bodily injury or property damage claims – these would be covered under your commercial general liability insurance’s Coverage A. They also do not provide protection against claims of intentionally false statements, which would be best handled by an employment practices liability policy or a cyber liability policy.