What Does General Liability Insurance Cover?
General liability insurance can protect your small business from unprecedented dangers. As experienced commercial insurance brokers in Houston, we have seen successful operating businesses, shutting down overnight due to their inability to compensate for damages brought on to them by lawsuits. We know, it sounds scary, so it’s always better to exercise caution and get general liability insurance. Before we tell you why Benchmark Brokers is the most preferred commercial insurance broker in Houston, let us give you an overview of general liability insurance.
What is General Liability Insurance?
General liability insurance (GLI) can protect your business from bodily injuries or property damage caused to and by customers and employees. The claims of GLI may be raised on account of your company’s operations, products, or services. For instance, your employee might spill or break something or a customer might end up injured due to some kind of an accident on your property through no fault of your own. In situations like these, not having GLI can instill significant financial losses and in some cases even lead to bankruptcy.
General liability insurance is also termed general commercial liability insurance. Don’t get confused, they both are the same and offer the same coverage. Let's give you an understanding of GLI coverages.
What Does A General Commercial Liability Insurance Policy Cover?
It must be mentioned that the exact coverage will be dependent on your general liability insurance policy. However, any basic GLI policy will cover the following.
Bodily Injury:
This extends to customers If any customer encounters any bodily injuries on your property, your GLI policy is obligated to cover damages like their medical bills. The extent of the injury and the reasons for the injury might be anywhere from someone simply falling by accident and injuring themselves or injury caused due to equipment failure or by any other means. It must be mentioned that the reason for the injury should not limit the claim for coverage in any way.
Property Damage:
In this scenario, the client’s property is in question. Depending on the nature of your business, if the client’s property is damaged in any way by your business or by your employee, then your GLI policy should cover the damages.
Reputational Harm:
This is in situations where your business is held liable for you or any of your employees, accidentally or deliberately saying something negative in a media interview about another company, individual, or business.
Copyright Infringement:
This generally occurs when your business is accused of using someone else’s work without giving them due credit and compensation. The accusation also extends to using and implementing plagiarized business marketing strategies.
Advertising Injury:
This claim counts in situations where your business or someone who is a part of your business has publicly defamed another business, individual, or organization.
These liability claims are unprecedented but prevalent for businesses. It is important to keep in mind that all policies won’t offer the same coverage. Here at Benchmark Brokers, we always advise our clients to extend their business liability coverage by purchasing a commercial umbrella insurance policy. This offers an extra layer of protection. However, understanding the nature of your business is also crucial before randomly investing in insurance policies. For example, if you’re running a service business that requires your trained professionals to visit client homes then your business is always exposed to liabilities like property damage. In this case, looking into the appropriate general commercial insurance policy that covers that is important.
What Is Not Covered Under Your General Liability Insurance Policy?
The most common mistake made by businesses is not knowing the scope of their policies. Although it is your commercial insurance broker’s responsibility to explain the limitations of your policy, any business should know exactly what their insurance policy covers and what it does not. Here are some things your GLI policy does not cover,
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Employee Injuries and illnesses: Contradictory to popular belief, your general commercial liability insurance does not cover employee injuries and illnesses. A worker's compensation insurance is required to cover this parameter. Depending on the nature of your business, you should opt to have this covered. Commercial umbrella insurance also covers this specific aspect.
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Auto Accidents: A commercial auto insurance policy is required to cover any damages or accidents that might occur to vehicles owned by you. A hired or non-owned auto insurance offers coverage on accidents to personal cars or cars that are on hire.
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Theft or Damage to Business Property: Neither general liability insurance nor commercial umbrella insurance covers thefts and damages to property. Commercial property insurance is required to cover this.
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Professional Mistakes: An E&O ( errors and omission insurance ) is required in this scenario. An E&O insurance policy is also referred to as professional liability insurance.
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Illegal Acts and Criminal Activities: It's time to call a lawyer because this is beyond the scope of GLI and commercial umbrella insurance policies.
Claims that Cost More than Liability Insurance: Having commercial umbrella insurance comes in handy when claims made are beyond the scope of your liability insurance.
Who Needs General Commercial Liability Insurance?
If your business is exposed to these situations you will require a GLI policy.
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If your business is open to clients, vendors, and customers
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If you or your business uses social media.
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If your business uses third party vendors or locations
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If you’re obligated to have a GLI policy by clients to do business with them.
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If you have temps or contract-based personnel for limited periods
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If you advertise or create marketing material for your business.
It must be mentioned that you’re not obligated by law to have general liability insurance; however, you’re exposing your business to risk if you choose not to have it.
How Much Coverage do you Require?
Before mentioning the cost of coverage, it must be mentioned that the cost of general liability insurance is dependent on a few factors.
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The type of operation you’re running. High-risk businesses have to pay a higher premium.
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The number of years you’ve been in business.
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The size and location of your business.
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Your business’s claim history.
Coming to the question, in general, small businesses require around 1 million dollar coverage per incident and a 2 million dollar aggregate policy limit. The policy period is generally a year. This is a generic estimation, the kind of coverage is heavily dependent on your business and you need to consult a commercial insurance broker to figure out the exact amount of liability coverage your business requires.
The Best Place to Buy General Liability Insurance in Houston
Benchmark Brokers is Houston’s one-stop-shop for all your insurance needs. If you’re looking for general liability insurance all you have to do is sign into our website, fill in your details and compare different policies and pick the one that suits you the best. It is that simple. Buying insurance has never been this simple.
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