It’s pretty much an established fact that we live in an extremely litigious society these days. It’s an absolute necessity that business owners look into General Liability Insurance to help protect themselves from lawsuits. The following is a brief overview of the nature of general liability insurance and its coverage.
Does my Business Need It?
You’d be surprised. Many business owners think that, since they don’t own a restaurant, say, where someone could slip on a floor or break a tooth on an olive, for example, that they don’t need coverage. What they don’t realize is that any company providing a service is at risk for a liability lawsuit. Any business entity dispensing advice, opinions or solutions could face this kind of litigation.
General liability insurance covers claims related to negligence like bodily and personal injury, property damage, and advertising injury (also known as false advertising). It will also cover legal costs incurred during litigation, regardless of the validity of the claim. General liability does not cover incidents in which criminal intent is involved or litigation involving punitive damages.
General liability coverage is often offered to businesses in a package called a Business Owner’s Policy or BOP. Make sure that you look closely into the general liability coverage in these packages, as they are often tailor-made for low-risk businesses. You may want to purchase general liability coverage in its own right if you feel your business is at a higher risk of litigation.
Just as with your auto insurance, your coverage needs will vary from state to state. Look into the average damage amount awarded in your state- if it’s on the higher end, you will need higher coverage limits. As with other insurance coverage, each policy will set limits on the amount owed by either the insurer or the insured in a policy period. Consulting an experienced insurance broker is a good idea to make sure you get sufficient coverage for your business.
Protecting your Business
Make sure to stay on top of any incidents that could lead to litigation. Just as with your auto insurance, you should report an accident right away and make sure that you compile accurate documentation on the incident and submit to your insurer.
Also, make sure to train your employees to prepare against or respond to such incidents. Everything from basic customer service to health and safety standards can be involved in a liability claim. Having a well-trained and prepped staff will supplement your insurance coverage and go a long way towards protecting your business and its interests.
By Austin Becker