For Your Small Business: What is General Liability Insurance?

By The Law Office of Yoel Molina.
 
Despite the fact that general liability insurance is typically not mandated by law, most organizations will find it to be imperative to have it. General liability insurance prevents you from having to pay out of pocket for damages or injuries if you cause an auto accident, just as your auto policy's liability coverage does if you cause a pedestrian accident.
 
The definition of general liability insurance:
In the event that someone outside of your company gets hurt or has property damaged as a result of your firm, its activities, or its goods, general liability insurance safeguards both your personal and corporate assets. The damage or injury-related expenditures are covered by the insurance.

These policies, which are also known as business liability insurance and commercial general liability insurance, become effective after a client files a claim (also known as a complaint) against a business and the business is judged to be at fault for the incident. Depending on the policy you purchase, general liability insurance may provide coverage for financial losses, such as medical and legal costs, as well as for bodily injury and property damage.
 
What Is Covered by General Liability Insurance?
The following expenses are covered by general liability insurance that covers injuries or property damage:
 
- costs for treating injuries, replacing missed wages, and other expenses
- costs for fixing or replacing property, or monetary losses from property damage
- legal fees to defend your business, as well as the claimant's attorney fees and other court costs
-monetary and non
- financial losses resulting from errors in your company's advertising.
 
General liability insurance is applicable even if the accident or damage doesn't take place on your company's property. Imagine that you run a construction company and that when a client was touring the job site, a pile of two-by-fours fell and injured them. Or perhaps you go to a client's office to show them a new piece of software, and while you're there, your coffee destroys the client's computer. Even though some policies have regional restrictions, these incidences would be covered.
Your general liability insurance will have monetary limits on what the insurance company would pay, just like your auto policy, and depending on the policy you buy, some circumstances might not be covered.
 
What isn't covered by general liability insurance?
It's critical to thoroughly examine your policy because many situations might not be covered or you might need to add another kind of policy to be fully protected. Typically, general liability insurance policies do not provide coverage for:

Independent contractors as well as employees. General liability insurance protects you in case one of your workers bursts a pipe while installing a washing machine for a client. But it doesn't cover accidents that happen to your workers on the job, and it typically doesn't cover accidents that happen to independent contractors while they are working for you. The majority of general liability insurance coverage won't also cover independent contractors who harm or harm others while working for you. 
Circumstances that could be foreseen. Situations that might be anticipated based on the type of business you own are not covered by general liability insurance. For instance, if you own an ice skating rink, your insurance generally won't cover you if a skater trips and breaks their leg because it's realistic to anticipate that kind of incident at a skating rink.
Instances in which you violated legal requirements. For instance, your insurance company is likely to reject the claim if your client is hurt on a job site by falling debris and you didn't supply a hard hat.
Vehicle collisions. General liability insurance won't cover injuries or damages from motor accidents, even if your employee is driving for business-related purposes.
certain occupations, such as CPAs. Rather than conventional liability plans, professional liability insurance provides protection against losses brought on by the services and recommendations made by experts like accountants and consultants.

Other types of insurance may provide coverage for some of these events, and some jurisdictions may even mandate it, as with workers' compensation insurance, which protects employees hurt while on the job.
 
General Liability Insurance Policies: Types
The date of the damage or claim may affect the general liability insurance policy.

Policies that cover occurrences compensate for harms and losses sustained while the policy is in force, regardless of when a claim is made. Let's say a customer fell in your shop, but they didn't report it for months, and now your policy is no longer in effect. Even if the accident occurred while your coverage was still in force, you would still be protected against the claim.

Policies that are based on when a claim is made provide coverage. As long as the claim was made when your policy was in force, it doesn't matter when the harm or damage took place.

Consider that you run a hair salon and a client complains that a color service you gave her caused her hair to fall out. Let's imagine she was a client from the day your salon opened its doors in January, but you didn't get around to purchasing your insurance until March. It took your customer a while to find an attorney and submit a claim because her hair loss was gradual and she just fully realized the issue in March. Claims-made insurance would protect you if your hair salon was judged to be at fault even though you didn't have it when the damage occurred because it was in force at the time the claim was made.
 
What Is the Price of General Liability Insurance?
A general liability insurance coverage can cost anywhere between $300 and $1,000 a year, based on a variety of variables, such as:
-the location of your firm
-the risks associated with it
-the payment limits you select
-the deductible you select
-the number of employees you have.

General liability insurance costs vary depending on where you do business, just like customers in one city pay different auto insurance rates than customers in another area. General liability insurance may cost more for some organizations because insurers consider their risk or the potential cost of claims is higher, just like an auto insurer may charge more to insure a fancy automobile than an economy car.
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The businesses with the biggest risk are typically those in the construction industry and those that operate remotely. Businesses in the information technology industry, real estate agencies, and similar services are probably at the lower end of the spectrum.


If you have any questions about this article or similar matters, please contact our office, the Law Office of Yoel Molina, P.A., at fd@molawoffice.com or 305-548-5020, option 1