As a business owner, there are many risks that you need to consider. One of the biggest risks is liability or the potential for your business to be held responsible for damages or injuries caused to others. This is where general liability insurance comes in.
General liability insurance, also known as commercial general liability insurance, is a type of business insurance that provides coverage for damages or injuries that your business may be liable for.
Here are six reasons why every business needs general liability insurance.
Who needs general liability insurance?
Business owners who sell products or provide services to customers need general liability insurance. A significant number of small businesses will face property or general liability claims for unexpected incidents and accidents. General liability insurance can protect a business against the costs associated with property or general liability claims.
Protect Your Business’s Reputation
A lawsuit can have a negative impact on your business’s reputation, regardless of the outcome. By carrying general liability insurance, you can demonstrate to your clients and customers that you take their safety and well-being seriously, and that you are prepared to take responsibility for any damages or injuries that may occur.
By demonstrating that you are willing to take responsibility for any potential harm caused by your business activities, you show that you value your customers’ well-being and are committed to providing a safe environment for them to do business. This can help build strong relationships with your clients and customers.
Protection Against Bodily Injury Claims
If a customer or client is injured on your business premises or as a result of your business activities, you may be held liable for their injuries.
General liability insurance can help protect your business by covering the cost of medical expenses, legal fees, and any other damages awarded to the injured party.
As a business owner, you are responsible for the work you and your employees do for customers, as well as your customers’ health and safety while they are at your workplace. As a result, your customers can initiate legal claims against you and your company if they are injured or their property is damaged in the course of doing business. Under these circumstances, general liability insurance can help protect you against the financial costs of legal claims brought against your business.
What does general liability insurance cover?
General liability insurance provides coverage for the costs of dealing with claims that your business caused, including the following:
- Third-party bodily injury (e.g., a customer falls and becomes injured in front of your store)
- Third-party property damage (e.g., your employee damages the floor when installing some type of equipment at a customer’s residence)
- Reputational harm (e.g., libel, slander)
- Advertising injury (e.g., copyright infringement, false claims)
- Damage to rental property (e.g., due to fire, flood, explosion and other causes)
Your business can be sued by a competitor if you or an employee makes up unfounded claims about them. These claims could result in a loss of customers, revenue and trust for that competitor. General liability insurance can cover the legal costs involved in defending your business against these claims. Reputational harm can occur through the following means:
- Libel (i.e., defaming someone in print, on the radio, on TV or over the internet)
- Slander (i.e., defaming someone through oral statements or gestures)
- Defamation of the competitor’s products or services
- Violation of the competitor’s privacy
What is general liability insurance?
General liability insurance (also known as commercial general liability insurance) provides coverage against claims that may arise when a third party is injured on your premises (e.g., a customer trips on the carpet in your store and hurts their arm) or an employee accidentally damages the customer’s property (e.g., an employee breaks a wall while installing equipment at a customer’s home). General liability insurance does not protect against claims that relate to professional or business practices.
Peace of Mind
Running a business can be stressful. And the last thing you want to worry about is the possibility of a lawsuit. Carrying general liability insurance can provide even greater peace of mind for business owners. Who operate in high-risk industries or engage in activities that are more prone to accidents or injuries.
For instance, a construction company that works on tall buildings. Or a manufacturer that produces heavy machinery may face greater risks of bodily injury or property damage.
By carrying general liability insurance, these businesses can protect themselves against potentially devastating financial losses, giving them peace of mind and allowing them to focus on growing their business without worrying about potential legal risks.
Requirements for Certain Contracts
Many contracts with clients or vendors require that your business carry general liability insurance. Without this insurance, you may not be able to secure certain contracts or may be in violation of existing contracts. Having general liability insurance may help your business meet contract requirements. And give you a competitive advantage over other businesses that do not have this coverage.
Clients and vendors may prefer to work with businesses that have general liability insurance. Because it shows that they are financially responsible and prepared to handle unexpected incidents. Additionally, some clients or vendors may require a certain level of coverage. Such as a minimum liability limit to work with your business.
Coverage for Property Damage
If your business causes damage to someone else’s property. You may be held responsible for the cost of repairs or replacement.
General liability insurance can provide coverage for property damage claims, protecting your business from potentially costly lawsuits.