Small Business Series: General Liability Insurance?

Running a small business can be incredibly rewarding, but it can also come with its fair share of risks. From employee accidents to customer injuries, lawsuits can quickly pile up and leave you in financial ruin. That's where general liability insurance comes in withing a risk management plan.

General liability insurance, also known as GL insurance, is a type of insurance policy that provides coverage for a wide range of third-party claims against a business. This includes bodily injury, property damage, and personal injury claims. It is often considered the foundation of a comprehensive business insurance program.

Let's say you own a coffee shop, and a customer slips and falls on a wet floor. They break their arm and need surgery, and they decide to sue your business for their medical expenses and lost wages. Without general liability insurance, you would be responsible for paying these costs out of pocket. With GL insurance, however, the policy would cover legal fees, settlements, and judgments resulting from covered claims, up to the policy's limits.

But it's not just bodily injury claims that GL insurance covers. It can also help protect your business from reputational harm by covering advertising and personal injury claims, such as libel and slander. Let's say you own a marketing company, and a client sues you for using a copyrighted image in an advertisement. GL insurance would cover the legal fees and any damages awarded, up to the policy's limits.

Many small business owners, especially those just starting out, may think that general liability insurance is an unnecessary expense. However, one lawsuit can quickly wipe out all of your hard work and leave you in financial ruin. And even if you are not found liable for the damages, the cost of defending yourself in court can be staggering. By carrying general liability insurance, you are protecting your business and your assets from unforeseen events that could lead to significant financial losses.

It's important to note that general liability insurance does not cover all types of liability. If your business provides professional services, you may need to consider professional liability insurance to protect against claims of negligence or errors and omissions. If you have employees, you may need to consider workers' compensation insurance to cover their medical expenses and lost wages if they are injured on the job.

General liability insurance is a must-have for any small business owner. It provides coverage for a wide range of third-party claims against your business, including bodily injury, property damage, and personal injury claims. By carrying this insurance, you are protecting your business and your assets from unforeseen events that could lead to significant financial losses. Be sure to speak with an experienced insurance agent and your legal counsel to determine the coverage limits and policy options that are right for your business.