Commercial general liability policies are among the most common types of business insurance. If you work with the public, it’s essential, and businesses typically take out a policy at different points depending on their needs.
Below, we’ll explore what general liability policies cover and when businesses typically add it to their list of insurance policies.
What General Liability Policy Covers a Business for?
Commercial general liability insurance protects your business against a range of business risks, including:
- Property damage caused by you or your employees
- Product-related injuries and damage
- Medical payments for injured customers
- Liability for injuries at your business
- Legal fees and defense costs
- Libel or slander claims
- Personal and advertising injury lawsuits
It’s a broad term that can cover many types of claims and help protect your business from some of the potential costs of working with the public when things go wrong.
From slips and trips on a wet floor without a wet floor sign in a corner shop to an employee damaging someone’s property while installing new furniture, general liability is one of the most comprehensive insurance policies.
That said, a general liability policy doesn’t cover every type of loss. Common exclusions include employees’ work-related injuries (which would fall under workers’ compensation insurance), damage to the business’s own property, professional mistakes, cyberattacks, and business-related vehicle accidents. These generally require other policies.
Policies will also have coverage limits, so always read the terms and conditions.
When Is the Best Time to Get General Liability Insurance?
Technically, the best time to take out a policy is before the business begins operating in the public.
Whether you’re opening a physical shop or if you’re about to start offering services, if you’re working with the public, there’s the potential for damages, be it bodily harm or property damage, and you want to be protected against that.
Many US commercial landlords also require tenants to maintain general liability insurance and provide a certificate of insurance (COI). Some companies and government organizations may also require vendors or contractors to provide proof of general liability coverage before starting work.
And if you’re working from home, such as a self-employed hairdresser, for example, don’t assume that your homeowners insurance is enough. Homeowners insurance generally provides limited protection for business-related risks.
Always consider updating your general liability policy as your business changes, for example, if you expand into new services or locations. You may not be covered unless you update your policy.
What Insurance Policies Should a Business Have?
The type of insurance policies required depends on the business operations. A general liability policy is usually essential for most businesses, and a business owner’s policy can also be useful.
A business owner’s policy is more of an all-in-one package for small- to medium-sized businesses. It combines general liability, commercial property insurance, and business interruption (or business income) insurance into a single plan, so it’s a great option.
Other useful types of insurance can be:
- Workers’ compensation insurance
- Professional liability insurance (E&O)
- Commercial auto insurance
- Cyber liability insurance
- Product liability insurance
You can always contact an insurance advisor and go through your business so they can tell you which policy you should have.
A general liability policy is a great fallback for your business. If, in the unfortunate situation that something should happen, you know that your business has a financial cushion to manage the situation.
