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What You Should Know About General Liability Insurance

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What You Should Know About General Liability Insurance

About 40% of businesses don’t reopen after a disaster. They often don’t have the right insurance coverage because they don’t understand the different insurance policies. 

They think that they don’t need insurance, or that general liability insurance covers everything. 

Find out what general liability insurance does cover and the most common myths about commercial insurance. 

What General Liability Insurance Covers

The best way to think about general liability is to ask yourself what you could be held liable for in your business.

General liability insurance covers your business if there are physical damages such as bodily harm. A customer might slip on ice in your parking lot and break a wrist. Someone could trip over a wire and suffer a sprain.

Without insurance, your business would likely be held responsible. You’d have to pay for medical expenses plus additional damages out of pocket.

Physical damage also includes property. For instance, if your employee installs a TV and damages a customer’s wall. That’s physical property damage that’s covered by general liability.

What about your property? General liability doesn’t cover your property, only third-party damages. You’ll need to have a property insurance policy.

There are liabilities that aren’t physical damages that general liability insurance does cover. You could harm a competitor’s reputation if you spoke badly of them. They could sue you and hold you responsible for reputational damages.

General liability insurance does cover that. It also covers you in copyright infringement cases. The insurance company covers legal fees, compensation, punitive damages, and pain and suffering.

General Liability Insurance Myths

Small business owners are underinsured because they think that general liability insurance covers every risk in the business. That is one of the greatest myths of business insurance. You need to have separate policies to cover all of your risks.

General liability primarily covers physical damages to people. Are your employees covered by general liability if they are injured at work?

They are not. You have to have a separate workers’ compensation insurance policy.

Another common myth is that your business is covered if there’s a flood. Unless you have a flood insurance policy, it isn’t going to be covered.

Are you a remote worker or a home-based business? You might think that you’re covered by renter’s insurance or homeowner’s insurance. You’re not.

These policies have specific restrictions on anything business-related. You’ll need to have a separate insurance policy for your business activities.

You’ll want to work with an insurance company to make sure you have full coverage. Once you do get insurance, get a certificate of insurance as proof of your insurance policies. Landlords and licensing agencies often ask for proof of insurance.

Learn More About Business Insurance

Did you learn a lot about general liability insurance? It’s misunderstood by a lot of business owners, and they don’t learn these things until it’s too late.

You can take this information and work with an insurance agent to make sure you have the right insurance policies in place. You’ll have peace of mind knowing your business is protected.

For more insights to help you grow your business, visit the Business section of this site.

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