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Commercial General Liability Insurance is one of the most commonly purchased types of small business insurance. But many small business owners still have lots of questions about what it is, why it’s needed, and how it works. Here are answers to the top five questions we hear from our small business clients about general liability coverage.

1. What does general liability insurance cover?

General liability insurance covers claims of bodily injury or other physical injury or property damage. In the event of a covered lawsuit, such policies will typically pay for a legal defense as well as compensatory, general and punitive damages.

A typical general liability insurance policy covers:

- Bodily injury and property damage liability: If a visitor is injured on your premises, or you or your employee injures some or damages property on your client’s premises.

- Personal and advertising injury: Certain offenses you or your employees commit in the course of your business, such as libel, slander, disparagement or advertising copyright infringement.

- Medical expenses: Applicable medical costs if someone is injured and needs medical treatment due to an accident on your premises.

- Premises and operations liability: Bodily injury and property damage sustained by others at your premises or as a result of your business operations.

- Tenant’s liability: Claims of damage due to fire or other covered losses caused by you to premises that you rent.

Please note that this list includes typical coverages afforded under some policies. Be sure to examine your own policy carefully for any exclusions, limitations, or any other terms or conditions that may affect your coverage. The terms and conditions of your policy will prevail.

2. Why do I need general liability insurance?

Even if you don’t expect to ever face a claim, General Liability Insurance is a smart, inexpensive investment in your company’s future. Accidents do happen, and people who are injured or whose property is damaged will expect compensation. Although such accidents may be no fault of your own, you’ll still be held financially responsible for them, and it only takes one such incident to break the bank for most small businesses.

In the event of certain types of lawsuits, even if you feel you’re not at fault, you’ll likely spend a hefty sum trying to prove it in court. For covered suits, general liability insurance pays for a legal defense and any settlement award, up to the limits specified by the policy.

Additionally, many client companies will have contract requirements that mandate that their business partners or vendors carry general liability coverage. Such contract requirements protect the client from incurring any costs in the unlikely event that someone or something should be injured or damaged in the course of your business relationship.

If you’re still not sure if you’re one who needs general liability insurance, there’s no cost to speak with an agent or broker for advice and a no-obligation quote.

3. How do I determine how much coverage I need for my business?

Your insurance agent or broker can help you assess the potential liability for your business, which varies depending on the type of industry your business engages in, as well as other factors.

Your location is one consideration, as courts in some states have historically made higher damage awards than those in other states. Businesses in those states may wish to consider carrying general liability insurance with higher coverage limits.

Lower-risk businesses, such as accounting firms or IT consultancies, may feel comfortable with lower coverage limits, while businesses in higher-risk fields, such as construction, may need more coverage. For small businesses with less risk, a combined general liability and property insurance package may be a cost-effective option. Such dual policies are known as a Business Owner’s Policy or BOP.

4. I’m worried that the coverage limits on my general liability policy aren’t high enough. What can I do to be sure I have enough coverage if I get sued?

If you’ve got a $1 million general liability policy, but you’re worried that you’ll be sued and your legal costs and court-ordered settlement could be even higher than $1 million, you may wish to purchase an excess liability insurance policy. What is this type of insurance? Also known as umbrella insurance, excess insurance is an inexpensive way to provide additional coverage when the limits of insurance on an underlying policy are exceeded.

For instance, if you have $1 million in general liability coverage, but a court orders you to pay $1.5 million in compensation, the right excess insurance policy would pay for the difference of $500,000. In addition to general liability policies, an umbrella insurance policy also adds coverage to your hired and non-owned auto liability and employer’s liability insurance policies, at no additional cost. However, umbrella coverage does not apply to professional liability insurance.

For contractors and consultants, some clients require excess liability insurance in their contracts to ensure that their vendors are financially capable of paying a large damage award in the event of a lawsuit. Client contracts may also require other types of insurance, such as professional liability or workers’ compensation.

5. How can I reduce my risk of having to file a general liability claim?

While it’s good to have general liability coverage, it’s even better when you don’t have to use it. There are several ways you can cut your risk exposure and reduce the chances that you’ll face a lawsuit:

- Provide proper training for all employees and subcontractors.

- Institute safety policies, processes and procedures appropriate for your line of work.

- Inspect your place of business for hazards that could result in injury.

- Maintain your office space, furnishings and equipment in top condition to reduce the risk of injury or property damage.

- Ensure that smoke detectors are operational and emergency exits are clearly marked and unobstructed.

- Restrict access to hazardous areas or equipment to authorized personnel only.

Ask your insurance agent or broker for additional tips on how you can reduce your risk.

Planning a nice summer income or wanting to take the plunge into full time self employment by choosing to start a pool cleaning business? In either case apart from formal training, equipment and technique information, it is absolutely imperative to seek insurance before floating such a venture. While most business advisors will be able to give this information easily, not many will be able to help when it comes to deciphering the business insurance you need for your pool cleaning business.

Business insurance is the only way to safeguard your interest especially when the business is a self employment scheme too. When starting a pool cleaning service make sure that you do not purchase the lowest premium business insurance offer. Do your research to ensure that what you select is best suited to your needs.

Let us begin with an assessment of the business insurance needs of a pool cleanliness business. It is very important to be covered against accidents and damages caused during the cleaning process. Since a pool is a fairly expensive construction with filter plants and other such expensive products, one must be insured to pay the losses if any damage occurs during the cleaning process. Further still, employees must be covered by the pool cleanliness business owner, so as to ensure resource safety. Vehicle insurance for the pool truck is mandatory too. Third party insurance will help fortify the pool business owner’s onus even more.

Based on the needs of the pool cleanliness business owner, a specific insurance can be chosen. A BOP or business owner’s policy will help cover the general protection needs of both property and liability of the pool cleanliness business owner. However since most pool cleanliness businesses hire a small staff a BOP might not work well since it caters to large staff organizations. General liability insurance will work very well for a start up firm in the pool cleanliness industry. A profession liability (errors and omissions) is also a form of insurance that works well for a pool cleanliness business owner, since it covers even those losses that might occur due to errors in judgment. A business automobile insurance of course is as important as the pool truck itself. These and many other kinds of insurances must be considered in totality before the decision is made.

Accidents can happen any time. Never make the mistake of getting into a commercial set up without appropriate cover. A seemingly simple job like pool cleaning can go wrong and highly expensive equipment can end up being damaged. Your lifetime savings could be soaked up by a simple error on your part. It is true that specially when starting a pool cleaning business, an insurance premium might seem like a useless expense. However never make the fatal mistake of taking the plunge without adequate safety. In fact starting a pool cleanliness business without an insurance cover will be like a non swimmer jumping into the deep side of a pool without a floating device.

When most people decide to venture into business, insurance is one component that tends to be forgotten. The business owner may be busy trying to set up or looking for funding and licenses that small business insurance usually takes a back step. This is usually an essential part of any business no matter how big or small. When you are starting a new company there are many risks involved. Since you cannot foresee the future and something unexpected happens, insurance gives you the ability to protect yourself should such an eventuality occur when you are least prepared.

When looking for small business insurance, you need to know the basic types that are available. They are general liability insurance, property insurance and workers’ compensation insurance. Liability insurance covers people who come into harm’s way near the office during working hours. Should anything happen to an individual in your office this cover helps your company settle various costs of treatment ranging from surgery to rehabilitation.

The property insurance is designed to protect the business and covers renovation costs should the office suffer a calamity. This could be due to vandalism, fire, accidents or thefts. There are also some types of small business insurance that cover the cost of office equipment. The workers’ compensation insurance is designed to compensate employees who are injured or disabled due to work related circumstances. It also protects the business from lawsuits against the company when employees claim illness or job related injuries.

When looking for a good insurance accompany, ensure that you get one that will get an insurance policy that is tailor-made for your business. A good insurance company will guide you into a policy that is affordable and effective. In addition, research and ensure that they cover small businesses and have your best interests at heart.

Business insurance policies come in all manner of shapes and sizes granting owners with different forms of cover from liability to earthquakes. But as a business owner what are the insurance policy basics that will ensure your company is covered?

General liability insurance is one of the most important types of cover that any business can have. Fundamentally it ensures that the company is covered if any accidents or injuries occur on the premises, or if any of the company products harm or injure anyone in any way. You must be careful with this type of cover, the clue is in the title; as a general insurance policy most contracts will be riddled with exclusions that enable the insurance company to hold payment if the injury or accident was caused due to an error in safety procedures or faulty workmanship. As with most things in business, it pays to read the small print.

Business owners should strongly consider the need for property insurance. Most policies cover properties in the general sense from all manner of occurrences. In the past this was normally based on a named peril system although this is now being surpassed by more general policies. It is still important however to check the details of the cover and understand exactly what occurrences are covered should your property be damaged. If the cover does not have any specific perils that you expect may be probable then it is usually possible to add this to your policy. Not as much a problem in this country, but occurrences such as earthquakes and landslides can be deemed as additional coverage options, if your business premises are located in a flood plain though, having flood cover is probably advisable.

In a world where lawsuit and counter-lawsuit are increasingly becoming a part of the legal process it is important to have some form of worker compensation cover in your policy. Most countries now actually demand this by law creating a situation where owners are liable for injury on the business premises. While during the early stages of your insurance period this will most likely be charged for a blanket fee, if your workspace encounters many accidents the rates for this form of coverage are likely to change.

For those in a business where vehicles such as vans are cars are used extensively it is important to have automobile coverage. Commercial vehicles have a particularly complicated system of liability; even if an employee is driving their own vehicle for business purposes an accident can mean the company is liable. The same can be said if the company vehicle is being used for trips to and from home. In addition company vehicles usually have excessive amounts of equipment stored in them meaning that theft and damage can be a problem.

As well as these basics there are certain inclusions that are advisable for business owners. One of these is to have discrimination liability cover. This is particularly important in either racial discrimination or sexual harassment cases. Normally this type of cover will not be included in general liability coverage. Insurance for specialist equipment on a case to case basis can also be advisable; machinery can be expensive and in many companies is essential to operations. Having cover that will pay for either repair or replacement can be extremely useful.

Hopefully this article has given business owners and idea of the types of cover that are advisable for companies. Ultimately the purpose of cover is to protect your company from any unforeseen circumstances that may harm operations and profitability. It may be an added expense, but it is an expense worth paying.

If you’ve been keeping up with my blog posts lately you’ll know I’ve come to adding a few news posts from around the web on this subject. I’ve got a couple more today that are new and updated, so let me know what you think of em…

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