General liability insurance (GLI), also referred to as commercial general liability and business liability insurance, helps safeguard your business against the financial damage caused by lawsuits. All organizations can face claims of bodily injury and property damage. These claims can come up anytime, and without adequate coverage for them, you’d have to pay out of pocket to cover the financial loss incurred. A business can’t run without risks. Therefore, general liability insurance helps provide extensive coverage for claims that can come up during normal business operations.
What claims does commercial general liability insurance typically cover?
Here are some of the claims covered under this policy:
- Bodily injury to clients or customers, or property damage to someone else’s property where your business is at fault
- Reputational damage is done to someone else like slander, libel, malicious prosecution, violation of privacy, and wrongful eviction
- Advertising injuries, such as copyright infringement and other intellectual property thefts
- Hospital and other treatment costs for a client who suffers injuries on your business location
- Damages to a loaned or rented property in your office building that’s caused by a covered peril like fire or bad weather
Does the law mandate this coverage in Texas?
Most state laws do not mandate businesses to carry general liability insurance. However, it’s always a good idea to have general liability coverage. Failure to purchase adequate protection can put your company in jeopardy because the risks are endless. Contact your provider to know the details of this coverage and how they meet your specific needs.
Before taking out your general liability coverage, you must understand your state’s insurance laws. Work with experts in the insurance field who can recommend the best coverage plans for the nature of your business.
Why is general liability insurance coverage essential?
Reports have shown that approximately four out of ten SMEs are at risk of at least one general liability claim within ten years. This indicates that all companies need this policy. The financial expenses of a lawsuit can wreck a business, and this policy helps to minimize the costs.
There are multiple scenarios where costly liability claims can arise, even when carrying out regular work operations. You should consider taking out general liability insurance if you engage in any of these common business situations, such as:
- You or your staff members represent a client
- Meeting with clients to discuss face to face
- Working on another’s property or with another person’s property
- Using third-party locations for business activities (like construction companies)
- Advertising your business
These situations are general to businesses everywhere, so it is best to stay prepared. Many clients also request that a firm has general liability insurance coverage before they can employ their services. Customers who want to ensure that their rights are protected should anything go sideways, so having this coverage can also boost patronage. A certificate of general liability insurance is sufficient proof to allay the fears of a concerned client and encourage them to work with your company.
How much does general liability coverage typically cost?
Various factors determine the cost of your general liability policy. Insurance companies tend to group into high-risk and low-risk classes. The latter enjoy multiple benefits like discounts and subsidized rates, while the former may be charged significantly higher.
Here are some of the factors that are considered before determining your premium:
- Type of Industry (a construction company is a high-risk business and will be charged more than a consulting firm)
- Years of experience (if you’ve had several successful years in business with minimal damages, you may be seen as low-risk)
- Location (high-risk areas e.g., flood zones might result in increased insurance premiums for policyholders)
- Size (it’s obvious that the larger the company, the higher the risks)
- Building condition (an old building may attract higher rates compared to a fairly recent one)
- Policy details, like coverage limits and deductible costs (the higher your deductible, the lower your premium)
- Insurance claims history (keep your claims low for affordable rates)
- Yearly income (if your business has a larger annual income, it reduces your risk profile and insurance costs as well because then, you are better financially equipped to handle a crisis)
At Family Financial Insurance Group, our insurance specialists help ensure you have the right kind of business insurance tailored to your company’s unique needs. You can also visit our site to get a quote online.