General Liability Insurance

Accidents happen every day. Even the most safe operations can find themselves wrapped up in costly lawsuits because of an accident. Without the proper insurance, a business that is held responsible for physical injury, personal injury, advertising injury, or property damage, may be forced to shut down. General liability insurance gives peace of mind to business owners that an unforeseen accident won’t put their company out of business.

General liability insurance provides coverage for accidents or damages that businesses become legally responsible for. These kinds of accidents could include:

• Bodily injury –  work being performed for a customer causes an injury to the customer
• Property Damage – an accident with equipment causes damage to a neighbors building
• Personal Injury –  the business is accused of slander or libel
• Advertising injury – a company accidentally uses another company’s slogan or logo
• Medical Expenses – a customer who slips and falls at a business incurs medical costs
• Product liability- A company’s product causes an injury to a customer
• Damage to Rented Premises- a negligent employee accidently causes fire damage to the landlords building

In addition to coverage for actual injury or damages caused by a business the General liability policy also provides coverage for Defense costs. When a liability suit is brought against a business, the General liability insurance company provides defense, regardless of who is at fault. Attorney’s fees could be hundreds of dollars per hour. Without coverage for defense costs a company could be forced to shut down because it simply cannot afford to defend itself in court.

How Much Coverage Does a Business Need?

How much coverage a business needs can be very subjective. A business owner must ask themselves several questions:

• How risky is the business? Is it likely that someone will be hurt, property will be damaged, or the business will get sued simply from the operation of the business? A company that manufactures explosives is going to be a riskier endeavor than a company manufacturing stuffed animals.
• Where does the company operate? Many states carry a reputation for awarding large sums of money in lawsuits.
• What kind of assets / income / revenue does the company have? A company’s assets that need protecting are not just physical assets. Businesses make money and provide income for owners and employees. A lawsuit could devastate a business’ ability to operate.

Ultimately, the amount of coverage a business decides to purchase is up to the business and its legal counsel.