What is General Liability Insurance?

Accidents happen every day, and many are unforeseen, unpredictable and have the potential to ruin your business. You can protect yourself and your business from many of the common hazards of owning a business through general liability insurance. It is the most basic and foundational insurance protection for claims against your business. 

Also called small business liability insurance or commercial liability insurance, general liability insurance protects your business against third-party insurance claims of bodily injury, property damage and even reputational damage caused by your direct or indirect actions. Third-party claims are those brought by someone not associated with your insurance policy who has suffered an injury or loss. The insurance payment is ultimately made to this person, not the insured. 

General examples of general liability insurance claims include:Property damage – Someone else’s property is damaged and you are directly or indirectly responsible Personal injury – A customer or client comes to your business and is injured Product liability –  Products you design or manufacture are faulty Advertising lawsuit – Copyright infringement or reputational damage because of something you said or did

Claims like these can lead to substantial medical costs and legal fees that your company must pay, so without proper insurance coverage your business is left financially exposed. For business owners who need both general liability insurance and commercial property insurance, a business owner’s policy, or BOP, is a popular choice. A BOP bundles these two common insurance types together, providing owners with a more convenient and affordable option than purchasing separate policies from the same or different carriers.

Why do I need it?

If you interact with customers or the public in your business operations, and especially if you work in customers’ homes or offices, you need general liability insurance. It covers many of the common third-party accidents, physical injuries and property damage risks you could encounter.

General liability insurance is required by some states, and is sometimes mandatory to secure larger customer contracts especially with the government. Even more, some customers may not require general liability insurance but view it as a benefit, especially if they’re trying to decide between you and one of your competitors. 

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