What Is General Liability Insurance? And How Much Of It Do I Need?

General liability insurance is the first thing that comes to my mind when we talk about essential insurance policies for business people. It is also called commercial liability insurance and commercial general liability insurance.

But why is it needed in the first place? A very valid question!

Because general liability insurance protects you from many lawsuits related to bodily injury, property damage, etc., which can happen quickly but can cause many difficulties if not insured! So let's know what is General Liability Insurance?

What is general liability insurance?

General liability insurance is a life-saving policy for businesses and provides the following coverage:

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#1: Physical Injury

Let's say you are a home baker, and a customer comes to collect her engagement cake. But she twists her ankle when being chased by a dog on your property; She can sue you for her injury! don't care; Insurance may cover their medical bills and your legal costs.

#2: Property Damage

Consider, you are an event planning company, and you damage your client's tiles while making decorations for the event. Again, your customer can sue you for their damages. In this case, insurance will cover their loss and your legal costs.

#3: Product Liability

If you sell an automation part that malfunctions and damages a customer's automobile, you can be sued. Again, insurance may cover their losses and your legal costs!

#4: Some libel and slander statements

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Let's say you say your company/product is better than a competitor on a TV channel. Then your competitor can sue you for damaging your reputation. But, general liability insurance can be your defense. It can cover your legal costs.

In the absence of general liability, you risk the continuation of the business due to these lawsuits. Insurance can help you not only financially but with peace of mind and confidence that you are protected no matter what!

But the next question is, how much insurance do you need?

How Much General Liability Coverage Do You Need?

It's hard to predict what might go wrong for the next year, but there are ways to calculate a rough idea of ​​your general liability coverage limit.

Ask yourself these basic questions about your business, and you'll find yourself with a rough idea about your liability coverage limits!

Let's get started!

Q1. What is your business type?

Q2.What is the size of your business?

Q3. Who are your customers?

Question 4. In which area is your business located?

Question 5. What is your workforce?

Question 6. What is your business experience level?

Question 7. Where is the business located?

Question 8. Are you a sole proprietor?

Once you have considered all of the above questions, you will have a much better idea of ​​the extent of liability insurance coverage that you will need.

Basically, the more exposure you have, the higher the limit you should have.

Often, our business grows, but we don't consider that coverage limits our business needs. Ideally, we should be monitoring our business operations and see where we need more coverage with each passing year.

So, this brings us to our next question: How do we adapt our current policy to all of our business challenges?

How to upgrade your general liability insurance coverage?

The above introspection can give you a fair idea about your insurance needs.

And although general liability insurance coverage is fairly comprehensive, it does have its misconceptions. Thus, you can combine insurance policies for more comprehensive insurance coverage, also known as 'approval'.

Some of the support claims you can choose from include:

fire damage

alcohol liability

employment practices

cyber attacks

among others…

And if you assess that your business is exposed to greater liability risks than with these policies, Umbrella Insurance is at your service!

In layman's terms, umbrella insurance is like a top-up on top of your existing policy. Its cost is very less but it increases your coverage limit by many folds.

But you don't always have to step up. Sometimes you have to get down too. I mean if you need less coverage than your current one. Or even starting fresh and need less coverage than buying a full liability policy, opt for a practitioner's policy!

A business policy includes liability coverage within itself. This is ideal for low-risk businesses that do not want or need a separate liability policy.

But if you ask me, you should always pay enough money for insurance, because it is like an investment in case a calamity strikes. It will pay off more than it costs.

And this protection makes insurance mandatory!

And that's why let's see why we need general liability insurance in the first place!

Why does any business need general liability insurance coverage?

This is simple. General liability insurance gives you a variety of very common benefits.

Can destroy your business and prove fatal for it.

Thus, every business must have some amount of liability protection. And below are some businesses that can definitely benefit from some liability insurance:

You have a store, office, etc., open to your customers or even to the public. (Physical injury)

You move or work on or near your client's property. (property damage)

Your business has an active social handle and uses marketing and advertising channels. (defamatory and libel statement)

In short…

General Liability Coverage protects your business from any unseen litigation and gives you the ultimate confidence to run your business and make it prosperous!

It is not very expensive, and if you have sporadic needs, you can even opt for short term liability insurance! It will cost you even less! With that, I conclude, and I hope the information was helpful and helped resolve your query! And if you have any questions or suggestions, please leave them in the comments section below! I'm listening!