Because we live in a litigious society, small and medium-sized businesses have to protect their finances. If you or your employees work with customers, operate out of physical locations, advertise, or rent space to others, you should take out commercial general liability insurance. This can protect you if things go wrong and someone gets injured or their property gets damaged while they are interacting with you.
CGL insurance is extremely important for companies because it can cover the costs of a lawsuit, including the legal fees and any compensation your firm has to pay the claimant. Since some lawsuits result in a six or seven-figure fine, your insurance policy protects you from an event that could be detrimental to your firm’s finances. Let’s have a closer look at what is covered by CGL insurance and whether you should take out a policy.
What Does Commercial General Liability Insurance Cover?
Almost every business transaction poses some level of risk. For example, a contractor could damage a part of the customer’s property, fall and injure a passer-by, or accidentally cause a fire in the customer’s house. Similarly, people visiting your in-person location might slip and fall because there was water on the floor and you or your employees failed to put up a warning sign.
If the customer decides to file a lawsuit and ask for compensation, you might have to pay hundreds of thousands of dollars. Sometimes being sued can ruin a business’s finances as well as its reputation. To prevent such problems, most company owners take out CGI insurance, which covers them in case they inadvertently harm one of their customers.
Bodily Injury
The most common issue faced by business owners is bodily injury. This occurs when a member of the public gets injured while doing business with you. The risk is highest if you have a physical business location since people could fall down because of a slippery surface, items left on the floor, or loose carpeting. What’s more, customers could get hit by an object that falls off a shelf or they might cut themselves on sharp surfaces.
But not only businesses with a shop or office are at risk. If you or your employees visit people in their own homes, you should also take out CGL insurance to prevent bodily injury claims because you could inadvertently hurt someone while working at the customer’s property. For example, a contractor’s ladder could fall and hit someone standing on the street below.
Product Liability
Anyone who manufactures and sells a product is at risk of a lawsuit. No matter how well you test the item before putting it on the market, there is a small chance that something goes wrong and a customer gets injured while using it. Alternatively, customers might argue that your product damaged their property. For this reason, you should always make sure your CGL insurance includes product liability.
Tenant Liability
While some small businesses own their building, many rent an office or shop space from another company. This is a good way of saving money upfront since you won’t have to purchase property before starting your business. But renting also comes with a certain amount of risk. If you damage the building while occupying it, you’ll have to pay the landlord.
Fortunately, most CGL insurance policies include tenant liability. This type of coverage protects you if you, your employees, or your customers damage the structure of the building or the fixtures and fittings.
Advertising Injury
Many people who take out CGL insurance have a physical business location or interact with customers. But even if your business operates virtually and you don’t have regular contact with members of the public, you should consider carefully whether you are at risk. For instance, companies that advertise need to take out insurance because they could be sued for libel or slander.
Do I Need General Liability Insurance?
As you can see, most small or medium-sized businesses should purchase commercial general liability insurance. This includes people who perform their job at customers’ homes and everyone who welcomes members of the public in a physical location. Some firms that should take out a policy are shops of all kinds, construction businesses, law firms, doctor’s offices, and private educational institutions.
If you run a business that doesn’t involve meeting people face-to-face, for example, an online consultancy or shop, you should still consider taking out insurance. This is especially true if you rent office space or you advertise your services on a regular basis.
How Much Do I Need?
The majority of businesses never have an issue with general liability. But if a customer files a lawsuit, you might have to pay them a six or seven-figure compensation. So, how much insurance should you take out? The answer is that it depends on your business’s financial situation and the risk level. Most small businesses choose a policy that covers them for $1 million per occurrence, but if you work in a dangerous industry, you might need more.
How Can I Find the Best Policy?
Often, it’s hard to choose between the various options, especially if you’ve never had to purchase insurance for a business before. To help you decide how much insurance you need and which policy is the best, you should contact an experienced insurance specialist. They can examine your business’s current situation and then let you know what your options are.
You can use the contact form on our website to get in touch with us at ISU Armac. When reaching out, remember that we can help you faster if you provide a lot of information. In your initial email, tell us what kind of business you run, how large it is, how and where you interact with customers, and what types of insurance you already have. Then, we can get back to you with some quotes and help you figure out which CGL insurance policy is right for you.
What Other Types of Insurance Might I Need?
To fully protect your business, you’ll need several types of insurance. While commercial general liability insurance covers you if someone gets injured or their property gets damaged, it won’t help you if you face a lawsuit from your employees or your vehicle or property gets damaged.
Below, we’ll have a look at some of the other kinds of policies you might need. However, you should always speak to a professional before making a decision. Every business is different, and you may be overlooking something important such as cyber liability insurance or business interruption insurance.
Employment Practices Coverage
All current and prospective employees have to be treated with dignity and respect. Employers aren’t allowed to discriminate due to race, gender, nationality, or disability. If a worker believes that they have been discriminated against or that you have wrongfully terminated their employment, they can file a lawsuit against you. Employment practices coverage can protect you against this and cover any legal fees associated with this type of claim.
Auto Insurance
Many companies have one or more cars, and depending on their value, it can pay off to have them insured. For example, if you or your employees need your vehicle to get to your customers’ homes, drive clients to the airport, or make deliveries, your business can’t operate without a vehicle.
Thus, it can be worth protecting this asset. It’s important to remember that auto insurance can cover multiple types of vehicles such as cargo vans, delivery trucks, regular cars, and food trucks under the same policy.
Commercial Property Insurance
Many businesses own assets such as property, furniture, machinery used in manufacturing, and electronics. If there is damage such as a fire, flood, or vandalism, the company might not be able to operate until repairs are complete or the equipment is replaced. To get your business up and running again as soon as possible and to prevent large financial losses, you should protect your assets with commercial property insurance.
Workers’ Compensation Insurance
Even though most employers take care to protect their workers from harm, there are around 20,000 workplace injuries in the US every day. If one of your employees gets injured while performing their job, they might ask for compensation, especially if they require medical treatment, have to take time off work, or are suffering from a permanent disability due to the accident.
To protect your business’s interests and to make sure your employees can be compensated for any injuries, you should take out workers’ compensation insurance. Your insurance expert can let you know what your state’s requirements are and what level of coverage is best.
Almost every small or medium-sized business needs to take out commercial general liability insurance. Your policy can protect you in case someone gets injured or their property gets damaged while you are doing business with them. Because compensation for bodily harm can cost hundreds of thousands of dollars, it’s important for the future of your business that you take this precaution.
If you’ve never purchased insurance before, it can be hard to know which policy is suitable for you. Speaking with an experienced insurance specialist can be the easiest way of determining what kind of coverage you need and which company’s CGL insurance is most suitable for your business. Get in touch with us now at ISU Armac Insurance Services to discuss your situation with one of our experts.
