General liability insurance is a type of insurance that can protect homeowners and business owners from risky situations that could levy thousands of dollars in unexpected costs. These scenarios include financial loss caused by property damage, bodily injury, slander, and more. This insurance shields you from the financial fallout caused by follow-on lawsuits and medical costs.
What Is General Liability Insurance For?
Homeowners and businesses need general liability to protect themselves from potential lawsuits arising from misfortune. Accidents can happen on your property or site of business which could result in costly injuries and potentially expensive litigation fees. This is especially important if you own property that is especially valuable – such as a business or rental property – and can result in expensive payouts for any damages.
For example, let’s say you’re hosting an outdoor party. One of your guests falls down your stairs due to poor lighting conditions, and this results in injury. They have to be taken to the hospital as a result of their injuries. It also takes them weeks to recover. They decide to sue you because they believe you were partially responsible for their injuries. With general liability, you’re protected in both situations from the financial consequences of this lawsuit.
Medical Expense Coverage
In addition, this type of insurance can cover the medical costs created by the aforementioned accidents so you’re not forced to fork up the cash yourself. Regardless of whether you’re a homeowner or a business owner, general liability can assist you with the medical expenses of any injured parties. Medical bills rack up quickly and can be very costly nowadays.
For example, let’s circle back to the guest who slipped on the stairs and broke their leg. They’re immediately taken to the hospital after the accident where they have to undergo x-rays and medical procedures that end up costing thousands of dollars. Without general liability, you’d have to pay for this yourself.
General liability insurance can also help you cover the cost of expensive repairs or renovations which are necessary to fix the damage done to your property. This could be due to damages that were accidentally or intentionally done by homeowners, guests, or, in the case of a business owner, your employees. Whether the damages happened accidentally or intentionally, you might not have the funds to cover these unexpected expenses.
For example, let’s say an employee in your warehouse accidentally drives a forklift into the wall, creating a huge hole and damage to the surrounding warehouse equipment. It costs thousands of dollars to repair. This type of insurance can help you cover those expenses so you can hold onto your money for more important business expenses.
Theft or Vandalism
If you’re a business owner, it’s important to have this type of insurance to protect yourself from theft or vandalism. This type of insurance can help you cover the cost of any damages that are done to your property as a result of these crimes.
For example, if someone vandalizes your store by spray painting graffiti on the walls, general liability can help you pay for the cost of cleaning it up. Or, if someone breaks into your store and steals merchandise, this type of insurance can help you cover the cost of replacing what was stolen. Having this kind of insurance can give you peace of mind knowing that you’re protected in case something like this happens.
Act of Nature
No one can predict when a natural disaster will occur, but if you’re not prepared the consequences can be devastating. Natural disasters often covered by this type of insurance include floods, earthquakes, hurricanes, and tornadoes. This type of insurance can help cover the cost of repairing or rebuilding your home or business as a result of a natural disaster.
For example, let’s say a tornado hits your town and destroys your home. This kind of insurance can help you pay for the cost of repairing or rebuilding it. Or, if a hurricane causes flooding in your area and your business is flooded, this type of insurance can help you cover the cost of repairing the damage.
Reputation can be everything for a business, especially if you offer a service that depends on consumer trust. Reputational harm can be caused specifically by slander or a privacy violation.
Slander means making false statements about someone that harms their reputation. This can happen intentionally or accidentally. It might result from an act as simple as negative gossip that gets spread through word of mouth. If your company’s reputation has been sullied by an employee’s or contractor’s actions, general liability can help cover the cost of defamation lawsuits.
For example, your online reviews are very important and you depend on customer satisfaction to keep people coming back. An angry customer decides to write scathing reviews about your company when their service request is ignored. This could result in reputational harm that damages your good name and may even lose future business. General liability can help protect you against this type of lawsuit so it doesn’t hurt the financial stability of the business!
Privacy violation is another critical aspect of today’s information age. Privacy violations include the exposure of confidential information, exposure of trade secrets, accessing private computers or electronic accounts without proper authorization, or using any kind of device to install software that will allow someone access to your computer. Privacy violations occur more often than you think and they can have long-term, ill effects on the trust you portray to your customers.
For example, let’s say someone is illegally recording your conversations at work, then sharing them with others without your consent. This could damage the personal information of employees and customers alike, affecting their right to privacy. If you’re a small business owner who has been affected by this kind of reputational harm, general liability can help cover the cost of any lawsuits that arise as a result of these negative actions.
If you’re the owner of an expensive home, it’s recommended to get yourself general liability insurance to provide additional coverage. This is because there can often be greater risks associated with a more upscale lifestyle. More frequent and larger parties, home improvement work, expensive amenities and equipment, etc. are all correlated with expensive homes. This can create riskier situations in which you’d need to protect yourself.
This type of insurance can also assist with copyright infringement. Copyright infringement occurs when someone visits your website, downloads something you’ve made available for free use, and tries to sell it. This can be a very critical and expensive problem for a small business, specifically if you’re offering digital goods that can be easily duplicated.
For example, let’s say someone downloads your company’s entire digital catalog onto their computer. They then redistribute the files across many different online download/sharing sites hoping to make money off of your hard work. If you feel your intellectual property has been infringed upon, general liability can help protect you from both copyright lawsuits as well as any unforeseen expenses.
Web Hosting Issues
With this kind of insurance, you’ll also be able to cover your business against any losses that result from lawsuits related to web hosting issues. Web hosting is how your business stores files online to provide information to customers who are looking for it. Most businesses work with a hosting company. If something happens that causes your customers to lose information or have issues accessing it, your insurance can help cover the cost of the lawsuit against your hosting company.
If you’re a service-based or retail organization, your online presence is especially important since it’s likely that many people will be coming to your website for information. If anything were to go wrong with your hosting company and your customers are unable to access the site or their online purchases, you’d want insurance to protect yourself from potential customer lawsuits.
Last but not least, general liability insurance can help protect you against advertising injury. Advertising injury is when someone claims that they were injured by your advertisement or marketing material in some way.
For example, if an advertisement lacks important safety information regarding the use of a product, it could be considered “advertising injury.” Since there are so many different ways in which your advertisement could lead to such a claim, this kind of insurance can be the perfect way to get the compensation needed for any damages.
General liability is important for any business because it can help protect you from many risks. No matter what type of business you own, it’s important to know you’re protected in case something happens and you need to file a claim. You’ll have better peace of mind. Reach out to ISU Armac today to find out how we can safeguard you against the unexpected! We’re committed to providing you with the highest quality insurance at the lowest rates!