General liability insurance provides small businesses coverages for risks associated with customer injury, property damage to customers or other people, and advertising injury. It provides protection for your small business when lawsuits arise and can help the small business owner qualify for commercial property leases and contracts.
General liability is the most common insurance purchased by small business. In fact, most small companies need this insurance. If you rent or own an office or commercial space, then general liabiltiy insurance becomes more necessary. Typically, a bsuiness engaging clients through contracts will find this coverage is a requirement.
Even if not required through contract, if your small business works directly with clients and customers, or has facilities open to the public, you will benefit from commercial general liability insurance. The reality is that this type of business insurance can keep your company financially stable if you’re sued by a customer, other third-party or competitor.
General liability is so critical to protecting a small business, this is frequelty the first coverage purchased directly after owners start their business.
Generally speaking, a liability policy provides the small business coverage for common lawsuits and money claims from third parties (people outside your business) for bodily injury and property damage.
A general liability policy also provides for your legal defense costs if someone sues over a bodily injury, property damage, or advertising injury. An important protection, it can pay for everything from pay for an attorney to paying for court-ordered judgments and negotiated settlements.
Read more about what general liability insurance covers.
Generally not, but states may mandate it for certain industries like construction. While general liability insurance isn’t typically required by law, it’s still likely required by your landlord, mortgage company, or clients.
A landlord or client may ask your business to show a certificate of insurance as proof of your general liability insurance coverage. This document verifies that your business can handle any personal injury or property damage lawsuits.
And more importantly, the certificate gives your property manager, bank, or customer peace of mind that they won’t be stuck paying the costs of a lawsuit against your company.
Find out more about when general liability insurance is required.
General liability protection can help pay for legal fees from common third-party lawsuits. Here are a few common situations where general liability coverage protects home businesses, contractors, and small businesses.
|Home Business||Construction||Small Business|
You may need general liability to pay for a lawsuit from a courier who slips on your icy doorstep while delivering documents.
A client may ask you to provide a certificate of insurance in case you damage their equipment.
You sign a commercial lease and your landlord requires a general liability policy.
|Advertising Injury Protection||
You launch a website and want protection against accidental copyright infringement.
You want protection in case someone involved with a project accuses you of libel or slander.
You launch your first advertising campaign and want protection against advertising injury lawsuits.
You can start a quote by filling out our free online business quote for general liability insurance. Before you apply, you’ll need to have a few basic pieces of information about your business. That includes your:
Learn more about our general liability insurance application.
The cost of a general liability policy is based on a few rating factors. These factors include, but aren’t limited to:
General liability insurance costs an average of $52 per month. This is based on the median cost of policies written through IronPoint or our member agencies. In fact, 57% of oru small business customers pay less than $1200 per year.
If you buy any policy through IronPoint or with our member agencies, you can usually get proof of insurance online on the same day of you request. If you start a business insurance policy with IronPoint, you will frequently get a certificate same day or included with your new business documentation.
Your traditional insurance agents can sometimes take several weeks to provide a certificate of commercial liability insurance to new customers. This is because they are frequently not working directly with the insurance company. Delays can become an issue for a business owner who needs immediate proof of insurance to sign a pending contract or commercial lease.
With IronPoint, you can provide proof quickly for the contract or lease you’re planning to sign.
Independent contractors are similar to other small businesses in that they can be sued and held liable for injuries to others, property damage, or claims for advertising injuries.
Many contractors frequently operate out of a home office, so they don’t have a physical location, office space, or valuable equipment and, therefore, don’t need a business owner’s policy or commercial property insurance policy. However, they will still benefit from a general liability policy.
If you don’t want to purchase a general liability policy, you can ask your clients to add you to their policies as an additional insured. This will cover you for as long as you work for the client who insures you.
It’s important to note, your clients might pay a higher insurance premium if they add you as additional insured to their general liability policies. A cost they may transfer to you anyway. Also, your coverage ends once the contract expires.
If you are concerned about the risk your business undertakes or you have large revenues at risk, you can increase or extend your liability coverage with commercial umbrella insurance. An umbrella insurance policy will increase the liability limit, essentially providing your business with greater coverage for more expensive lawsuits or larger damages claims.
While many smaller businesses can get by only purchasing general liability, chances are, your business is more complex and has exposure to greater risks that those covered with a general liability policy.
If you have more exposures than basic liability, you can get additional protection with the following coverages:
General liability insurance is designed to provide protection for bodily injury, property damage, and advertising injuries claimed by others outside your business. Alternatively, professional liability insurance covers claims over the quality of professional consultation or services, for errors or omissions in the discharging of your professional services.
It is generally true that nearly all businesses need general liability insurance. However, businesses that provide professional services likely need additional protection from mistakes or failures from damaged clients.
Professional liability insurance is designed specifically for these types of claims or lawsuits. This type of policy helps businesses like law firms, financial advisors, consultants, and insurance agencies avoid the damaging expenses from lawsuits related to the quality of your work.
Read more about general liability vs. professional liability insurance.
No, but failing to carry general liability coverage could result in you having to pay for all the expenses related to a claim against your business. For example, while visiting your office a client slips on a rug and breaks their hip. Without general liability protection, you could be solely responsible for all the medical bills and legal fees. So, even though it’s not required by law, it should be a priority for your business.
Sometimes. If you elect a policy with a deducible, you choose the amount of your general liability deductible when you get an insurance quote. A deductible is a fixed out-of-pocket expense you agree to pay before your coverage starts to pay.
General liability insurance only pays for third-party damages, not yours. You’re considered the “first-party”. The “third-party” is the one that has a claim against you. This means general liability won’t cover your property or equipment against theft or damage.
Yes. Since general liability premiums are considered “a cost of doing business”, they usually can be written-off at tax time. That said, it’s a good idea to consult a tax professional to make sure.
No. General liability only provides coverage for claims against you by others for their bodily injuries or damage to their property. To protect from claims against you for professional neglect or mistakes, you need to have professional liability insurance.
A certificate of insurance (COI) is an official document that lists all coverages and limits on an insurance policy. Essentially, it proves that you have insurance and details your policy coverages and limits.
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