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5 Frequently Asked Questions About General Liability Insurance

Are you the proud owner of a small business? Do you want to find ways to protect your company from an unforeseen setback? If so, then you should learn all that you can about general liability insurance.

Sometimes the biggest setbacks are self-inflicted. All it takes is one mistake on the job to lead to thousands of dollars in damage for another party. That’s when general liability insurance can jump in to save the day.

See below for an in-depth guide on general liability insurance. In this article, we answer all the most common questions regarding general liability insurance for your business.

1. What Is General Liability Insurance?

Imagine the horror of receiving a call from your office one day saying that they’ve made a costly mistake on the job. Even worse, that mistake led to some form of property damage or injury.

In those moments, it might seem like all hope is lost. If you don’t have business insurance to back you up, then it will be you that’s responsible for covering the cost of repairs and/or recovery.

General liability insurance, also known as business liability insurance, is here to protect you from situations like this. It’s meant to provide financial relief for business owners on any claims taken out against their company.

As the name might imply, general liability covers a vast number of scenarios that businesses commonly come across. This includes things like:

  • Property Damage: Damage to another party’s property, such as when a faulty repair leads to water damage on a client’s house.
  • Injuries: Protects your company from any injuries to a third party, such as a client, from your service or property. Your employees don’t fall under this umbrella as that would be a workers’ comp matter.
  • Reputation Protection: Provides compensation for any action or claim that would tarnish a person’s reputation.
  • Advertising Injuries: Guards your company against any injuries that come from your marketing endeavors.

2. How Much Coverage Do I Need?

Now that you understand the purpose of general liability insurance and what it can protect you from, you might wonder how much coverage you need.

The answer depends on several things. First, you might consider the risk associated with your industry.

For example, if you offer a service such as HVAC maintenance, plumbing, or anything that goes to a client’s property, you may want a bit more coverage.

Second, you should consider the worst-case scenario for your business. What are some of the biggest liability cases from companies in your industry? You can research a few articles online to familiarize yourself with them.

After you determine the worst-case scenario, add up the costs and determine how much coverage you want. Remember, you can also add an umbrella insurance policy to provide more coverage if you’d like.

Next, create a budget to see how much you can afford in premiums each month. Try not to just reach for the lowest premiums you can find. That will result in less coverage in an unforeseen emergency.

3. What Are the Benefits of Having a Policy?

You’ve probably noticed a few benefits of having a general liability policy in this article already. However, there are more benefits to it than meets the eye. Such advantages include:

  1. Possibility for Larger Contracts: If you’re looking into landing bigger companies as clients, general liability insurance can help you do so. In many situations, you’re required to have a policy before you can even start bidding on their contracts.
  2. Protection for Top-Tier Workers: You want your top talent to know that you have their back. Everyone makes mistakes. General liability insurance can protect your workers from financial liability and keep them from jumping ship.
  3. More Stability: You can’t always predict the future. While injuries and damage are rare, it’s irresponsible not to prepare for them. General liability insurance will give you coverage in your hour of need. That way, your business operations won’t experience a setback.

4. Am I Always Covered?

As long as you have a policy out at the time of the claim, general liability insurance has you covered!

One thing you need to make sure of is not to cancel your policy immediately as you retire. You may still receive a claim from service years prior, then not have the coverage that you need.

Your coverage kicks in at the time of the claim. As long as you have a policy out when a claim gets filed, you’re covered.

5. Is It Legally Required?

You may wonder if a general liability insurance policy is legally required. If you’re in the state of New Jersey, then the answer is yes.

The state wants to make sure that companies and their clients are financially covered to provide more balance from a business-to-client relationship.

Believe it or not, they’re more concerned about you than the client. They want to make sure businesses aren’t folding because of the financial setback of a claim.

If an accident were to happen, your provider would step in to try to settle with the other party. That way, you can go about business as usual.

Invest in General Liability Insurance Today

Now that you have seen answers to the most common questions regarding general liability insurance, be sure to invest in your policy today.

Take the time to read up on this article for more information on the different types of business insurance policies. You’ll get an explanation of what they are as well.

For more inquiries on investing in the business insurance you need, please be sure to reach out to us via our contact us page and we will be happy to assist you further.