A small business has so many to-do items to check off to ensure success before even opening the “doors” for business.
What are you going to do or sell? Who is your customer base and target market? How will you advertise to let customers know you exist? Where will you operate your business?
All of these questions are essential to ask and answer to help your small business venture survives and thrives. One that is often missed though: What if something goes wrong?
That’s where general liability insurance comes into play.
What is General Liability Insurance?
Commercial general liability insurance (CGL), also known as business liability insurance, is the essential insurance for any business, big or small.
Liability insurance is designed to primarily protect your company against property damage and bodily injury that may arise from your location of operations or products and/or services you provide; the kind of unpredictable trouble that leads to costly lawsuits.
What does General Liability Cover?
It’s called ‘general’ because it covers a wide range of potential risks, and blankets your business with a wide safety net of protection.
This is your first line of defense against the unknown, and your most important weapon in protecting your business.
Whether you’re providing a service or producing a product, general liability is the policy to protect your small business in the case of claim or lawsuit arising from your operations. Here are some examples of the coverage offered under this policy:
Property damage (PD) claims that result from your business operations
Bodily Injury (BI) claims arising from your business operations
Advertising injury claims, in the case where your business causes injury to another individual or business in your marketing practices
Not only does it protect you from paying the direct amount of the suit, it also covers:
Costs associated with the defense of PD, BI, or advertising injury claims, including attorney fees, administrative fees, court costs
Settlement or judgement amounts
In most cases, if you caused damage to something or something, general liability is there to have your back and make sure you survive to see another day.
Who needs General Liability Insurance?
Another way to ask this question: can your small business be sued or liable for damages?
If you answer no, consider the last time the unexpected caught you by surprise.
It happens all the time:.
...a customer slips on the water that THEY spill on your restaurant floor and injure themselves.
...another competitor claims your social media posts are damaging their reputation.
...the newest shipment of your boutique’s most popular blouse starts giving customers a disfiguring rash.
...a bottle of wine in your general store falls and hits a customer on the head.
In every case, your business could face a lawsuit.
All of these seemingly random examples have happened to businesses just like yours. They come with unpredictability on their side, which means nobody is safe from the boogey man. All you can do is practice safety, make sure you’re covered by general liability insurance, and work for the best while being prepared for the worst.
You don’t even need to do anything wrong for someone else to claim you did.
It doesn’t matter if you’re big or small, just starting or well established, LLC or sole proprietor, freelancer or workforce of many, your small business can benefit from general liability.
How Much does General Liability Insurance Cost?
What you pay for your small business general liability insurance can vary greatly, from a few hundred dollars per year to a few thousand. There are a number of factors that drive the price, including:
Where you business is located
What you do, or what products you sell
Limits of Insurance and Deductible
Understandably, your business risk is assessed by your insurance carrier and their actuaries (math and probability wizards) to determine the likelihood of a claim arising from your business operations.
And, if something happens, how severe will it likely be?
If you run a small business specialized in website design, your premium will likely be toward the lower end of the spectrum as the risk associated with direct property damage or personal injury are fairly low.
If you run a hardware store, you’re likely to pay a higher premium as you’re typically operating out of a location frequented by foot traffic, where someone also suffer injury on premises or damage to personal property, and from where you’re selling products, which could injure someone.
Whatever the financial cost, you’re minimizing your exposure to catastrophic claims while maximizing your piece of mind.
What doesn’t General Liability cover?
While commercial general liability is very “general”, it isn’t designed for every exposure your business faces. Here are some of most common exposures businesses face that a CGL excludes from coverage:
Automobile Claims. Causing an accident, or causing injury to another party while using your vehicle isn’t covered. This would be covered under a Commercial Auto Policy.
Theft. If someone decides they like your work computers and take them in the middle of the night, you’re out of luck if you just have CGL. To protect your property, you’ll need to look into a Business Personal Property policy (commonly a part of a BOP), or an Inland Marine policy.
Your Injury or Illness. Bodily Injury coverage of the CGL policy doesn’t mean your bodily injury. Similarly it doesn’t apply to your employees. Having a workers compensation policy is your key to making sure your broken foot doesn’t lead to a broke wallet.
Breakage of your Equipment/Tools. This is similar to theft, and wouldn’t be covered under a liability policy.
Professional Services. If your business is engaged in professional review, advice, or preparation services, such as attorneys, agents, brokers, accountants, etc., your general liability will need to be supplemented with a professional liability (also known as E&O) policy.
Cyber Hacks. If someone is less interested in your computer, but rather the data on your computer, and decides to take it without asking, hopefully you have a cyber liability policy in place.
If you’re thinking you’re liability policy covers something but aren’t quite sure, ask your agent. That’s what we’re here for.
How can I get covered?
Getting a quote and putting coverage in place for your small business is easier than ever. Long gone are the days of multiple page forms, faxing back and forth, wet signatures, and lost mail.
You can get a quote for your company in as little as 5 minutes, and have a policy ready to go in as little as 10.
Our team is here to help you achieve your goals, and part of that is making sure your business is covered when disaster strikes. Talk with an agent over the phone to get all your questions answered and coverage started.
And if you don’t like talking to people, that’s ok too!
Citizens is partnered with the best small business insurance carriers, offering quick and accurate online insurance quotes and instant binding so you can save time, and get back to the important task of running your business.
However you want to get covered, make sure you do, because having a general liability safety net is one of the best business decisions you can make to ensure a bright future.