If you run a small business, you’re well aware of how many things can go wrong. Even if they haven’t happened to you personally, you’ve probably heard the horror stories. Whether accidental customer injuries, legal action from competitors or any of a thousand other heartburn-inducing scenarios, the risks and pitfalls of running even a very small enterprise can keep you up at night.
One of the most effective ways to protect your business from potential financial loss is with general liability insurance. Let’s explore how this kind of coverage helps keep small business owners confidently on track to success.
What Is General Liability Insurance
Also known as commercial general liability insurance, general liability insurance protects businesses from financial loss arising from claims of damage or injury caused directly or indirectly by your business operations. It can help cover the costs of legal fees, medical expenses and lawsuit damages from incidents that are not intentional in origin.
General liability insurance typically covers several key areas, including:
Bodily Injury
In the unfortunate event that a customer is injured on your business premises or as a result of your business activity, general liability insurance can help cover the costs of damages, medical expenses and legal fees. For example, a customer could be struck by ice falling from a business’s roof.
Property Damage
If a customer or client’s property is damaged as a result of your business activity, general liability insurance can help with the costs of repairs or replacement. For example, if you own a landscaping business and one of your employees accidentally damages a customer’s driveway property while providing service.
Personal Injury
Personal injury of a nonphysical nature to a third party—such as false advertising, libel or slander that results in financial loss—can be covered by general liability insurance. For example, a customer could claim that a business’s advertising materials contain misleading claims that resulted in the customer experiencing financial loss.
Advertising Injury
Copyright infringement or violation of intellectual property rights related to your business’s advertising or promotional materials can also be covered by general liability insurance. For example, an advertisement might accidentally include copyrighted material for which the owner seeks compensation.
Without adequate insurance coverage, a business could be severely impaired—or even bankrupted—when held financially responsible for harm arising from occurrences such as these.
What Coverage Does a Small Business Need?
As you can see, selecting the right general liability insurance can be a game changer for a small business. The amount of coverage your business needs will depend on several factors, including the size of your business, the industry you’re in and the specific risks your business faces.
But let’s not forget: There are other types of liability insurance, and these coverages can make a big difference when you need it. These include:
Umbrella Insurance
This type of policy provides additional liability coverage beyond the limits of your general liability policy.
Cyber Insurance
This covers financial losses resulting from data breaches, cyberattacks and other digital threats. In the age of advanced digital hazards, this kind of insurance is increasingly popular among business owners eager to protect themselves from rapidly evolving threats.
Product Liability Insurance
This covers claims of injury or property damage resulting from a defective product your business sells or manufactures.
Employment Practices Liability Coverage
An employment practices liability policy helps protect business owners against claims from a customer, client, or vendor alleging discrimination, wrongful termination, harassment (including sexual harassment), or other wrongful employment acts.
