General Liability Insurance
The most common insurance plan for small businesses is a general liability insurance plan, but it’s one of many types to consider. There’s commercial property insurance, product liability insurance, and professional liability insurance, but general liability is the umbrella that protects your business from lawsuits due to unavoidable risks.
Here’s a nightmare for business owners in every industry: you’re giving a tour of your office to a new (potentially lucrative) client. Unbeknownst to you, there’s a water spill around the corner that no one bothered to clean up. Your new client slips on this wet patch and falls on the hard tile floor. The damage is extensive – a broken arm, a lost business opportunity, and a lawsuit. General liability insurance protects you in this situation and others like it. If someone gets hurt on your property or because of work your employees have done, you want to be protected from getting sued.
General liability insurance is where most companies start when it comes protection, but it won’t be the only type of insurance that you’ll need. Depending on your industry, you may require two or three different types of business insurance. A good agent can help you through the process, so choosing the right company for general liability insurance is critical.
Questions to Ask
Before making any insurance choices, you’ll need to decide on a few things. Every business has different liabilities, and you’ll need to pick which areas to cover. For example, if you sell financial services or write commercials, product liability insurance is a waste of time. Here’s the questions you’ll want to ask yourself:
What Liabilities Must I Protect My Business From?
Your business will have its own unique set of risks. Are you worried about clients slipping and falling? Or employees burning themselves on hot equipment? Different types of businesses require different types of liability insurance, and legal requirements can vary by state. For example, you may be required to purchase general liability insurance before renting commercial property in Pennsylvania.
To make the process easier, write down the things you’re worried about happening at work. If you work with soldering irons and ovens, you’ll have concerns about the building burning down, or employees hurting themselves. If you have customers inside your establishment all day, you’ll worry about getting sued due to some sort of accident. Creating a ‘Worry List’ helps you determine your liabilities and eases the pressure of choosing an insurance carrier.
How Do I Pick the Right Insurance Company?
You might be tempted to let the same company cover both your business and personal insurance policies, but make sure they have ample experience in the business world. Remember, general liability insurance probably won’t be the only type of protection you need.
You don’t want to be underinsured, but you also shouldn’t pile on unnecessary protections. There’s little use for professional liability insurance if you make pottery or sell flowers. You’ll want an insurance carrier you can trust, one capable of navigating the complex nature of business insurance. If you already have a trustworthy agent with business experience, you’re already one step closer to finding the right insurance plan.
How Much Money Would My Business Need If Someone Gets Hurt?
Once you’ve decided on your protections, you’ll need to determine how much insurance to purchase. Lawsuits can be expensive, and medical bills for serious injuries can pile up quickly. If you’re a large business with hundreds of employees and customers, you’ll want heavy protections, possibly exceeding $1 million. In comparison, if you’re self-employed, that number can obviously come down. Discuss your options with your agent and find out how expensive it would be if someone got hurt and your business was responsible.
As a business owner, you’re responsible for a lot of people. You have employees you need to pay and protect, and customer you need to keep safe. Choosing the right type of general liability insurance will help you sleep easier at night, knowing your assets and business are protected. Don’t leave things up to chance, get insured and prevent yourself from becoming a target.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.