Estimated reading time: 5 minutes
Return To: North Carolina Business Insurance – The Ultimate Guide
If you are a business owner, at some point in time you have undoubtedly asked what liability insurance covers and whether or not your business actually needs it!
Each year, legal issues cost small businesses over $100 billion in the United States alone. It’s often the high cost of litigation that drives some businesses to bankruptcy.
So how does a business owner keep their company from going under as a result of lawsuits? A sure way to do so is by taking out a general liability insurance policy.
Keep reading to learn more about general liability insurance and what it covers.
What Is General Liability Insurance?
General liability insurance is insurance that provides your business with protection against claims that arise from injuries to people and damage to property. The insurance policy covers both legal costs and payouts for which your business would be responsible in case you’re found legally liable. What Does Liability Insurance Cover?
1. Third-Party Bodily Injury
When a person injures themselves on your business property, they can file a bodily injury claim. For instance, one of your clients is walking through your front office when they trip over an object, fall, and break their arm. The client can decide to make a claim for bodily injury against your company.
Your general liability insurance can help to cover all the costs of this claim.
2. Third-Party Property Damage
What happens when an activity happening in your business results in the damage of someone else’s property? For instance, you’re involved in a landscaping project when a tree stump accidentally rolls down into a neighbors’ pool and causes $1500 worth of damage to the pool.
If that neighbor makes a claim against your business for the damage, it’s your commercial general liability insurance that’ll help cover costs resulting from the claim.
3. Advertising Injury
How can a business cause advertising injury to a person or a business?
A good example is when one of your recent advertisements contains copyrighted music in the background. The artists who own the rights to the music can make a claim against your company for infringing their copyright. General liability insurance can cover the expenses of the claim.
4. Reputation Harm
How many instances have other businesses claimed that you’ve said things or made ads that harmed their reputation as a company?
For instance, you stated in an interview why you thought your services are superior to a competitor’s, and the competitor then claimed that your words harmed their reputation. In such a case, it’s your general liability insurance policy that’ll cover for the costs emanating from the claim.
Does Your Business Need General Liability Insurance?
Now that we’ve answered the question: what does general liability insurance cover? it’s time to talk about whether this type of insurance is necessary for your business.
You probably already know that the state law does not require any business to have work liability insurance. However, without this insurance cover, you stand to pay costs arising from liability claims that could potentially ruin your business, especially if you:
- Operate an office, store, or building that’s open to vendors, clients, and the general public
- Regularly market or advertise your products or services
- Work near or handle client property
- Use social media, either personally or professionally
How General Liability Insurance Benefits Your Business
So far, you’ve seen how having the appropriate amount of general liability insurance can protect your business. But are there ways in which this sort of insurance can also help the growth of your company? We’ve compiled five specific benefits you can expect from general liability insurance.
1. You’re Protected Against the Unexpected
The most obvious reason for Americans taking common types of insurance is to keep themselves safe from the unexpected.
No matter how much control you think you have over all aspects of operations in your business, you can never predict when an accident will happen. With adequate commercial liability coverage, you can always have the peace of mind that in the event of an incident, you have protection.
2. You Stand to Close More Large Contracts
How often do you bid for large contracts? If you have a general liability insurance cover, it could make you more attractive to your potential clients. Before accepting your bid or closing a deal, most clients require your firm to have liability coverage.
The reason for this is that clients want to know that if something goes wrong while you’re undertaking a project, you have the means to cover the costs.
3. Data Breach Liability Insurance – Protection For The Tech Age
In this digital era, data security is highly important. Any business that handles sensitive client information such as names, addresses, and social security information, needs to have general liability insurance policy that contains Data Breach Liability.
How prepared is your business in the event of a hacking situation? Not having liability coverage could result in irreparable damage.
4. You Don’t Need to Be Afraid of Injury Claims
The more often you meet face-to-face with clients, the higher the chances of injury claims. Fortunately, having general liability insurance gives you the assurance that in the unfortunate event of such a claim, you have protection.
5. Protection Against Staff Actions
Every employer wants to think that they have the best staff possible working for them. But how can you tell that one day they won’t be involved in something that might harm your company?
It may be something as simple as slander to a third-party. Sometimes, it’s a serious matter, such as an incident involving damage to someone’s property.
When these claims are brought on by third-parties, your general liability insurance coverage could help you out.
Do You Need General Liability Insurance For YOUR Business?
Now that you have the answer to the question: what does liability insurance cover? And have seen the benefits it could have to your business, it’s time to get a good general liability insurance policy for your business.
Are you interested in getting a quote that’s specifically tailored for the needs of your business? We can give you a quote today!