Commercial Liability Insurance protects businesses from lawsuits. Whether your company is a large or small business, even if you’re an independent contractor working by yourself, you need to consider buying liability insurance to protect your assets.
Commercial liability insurance comes in many forms, and General Liability Insurance is usually the first type of policy most businesses shop for. It may not be the only business policy you’ll need to buy, but it is an important policy to consider. It can save your company from major financial losses if you lose or have to settle a property damage lawsuit or personal injury claim. Even if you’re found not liable, legal defense fees can be costly, and this policy will cover those costs as well.
Other types of commercial insurance policies you’ll learn about at this blog are usually purchased along with GLI and they include Professional Liability Insurance, Errors and Omissions coverage, worker’s compensation, product liability insurance, commercial building insurance for property owners and a few more specialty products.
You can start the process of buying a general liability policy from an insurance agent or broker, or you can get quotes online. In the process, the insurance company usually will offer you other related policies you may need for your particular business. Before you purchase a policy though, we recommend you pay close attention to these three important aspects of any business policy:
The limits of general liability policies refer to the maximum amount the insurance company will pay out on a claim. It’s important to get the right amount of coverage for your business based on it’s specific risks. If you buy a policy with a $1 Million limit and you lose a suit for $1.2 Million, you’d be responsible for paying the other $200,000. That would bankrupt many small businesses.
Businesses with risk beyond their policy limits should consider an umbrella policy which is usually a cost effective way to cover additional risk. The best way to determine how much risk your business has is to sit down with an insurance broker.
Exclusions in liability insurance policies are simply things that are not covered. Obviously, it is important to find out if your policy has any exclusions before you purchase. Some examples to be on the lookout for include things such as intentional injury, acts of war, and breach of contract. Many times, additional policies can protect you from things not included in your general liability insurance.
Deductibles are the part of any claim that you pay out of pocket before the insurance company starts paying. Most general liability insurance policies have no deductible, but if you are a small business with minimal risk, you can cut the cost of your insurance by requesting a deductible. Just be sure it is an amount you can easily pay in the event of a claim.
How Much Do General Liability Insurance Premiums Cost?
Business insurance rates have been on the rise as of late, perhaps due to the number of lawsuits brought against companies. Unfortunately, many individuals have the perception that all businesses have deep pockets, but as a small business owner you know otherwise. That’s why it is so important to protect yourself with liability insurance.
General liability insurance can cost anywhere from a few hundred dollars a month to thousands of dollars a month. It all depends on the risks associated with your business, including your business location and your history of claims. As you add in other policies such as E&O, commercial vehicle coverage, worker’s comp, etc. your premiums will rise. But again, you may not need all the extra coverage, depending on the size and location of your business, your annual sales volume and a few other factors.
The cheapest way to buy commercial insurance is to get quotes online and cut out the middle man. Many sites offer multiple quotes, and you can even go to many of the big name insurers directly. While price shopping is wise, before you sign any policy it is also a good idea to get in touch with an agent or broker to make sure all your risks will be covered. When comparing policies keep those three important aspects above in mind, and you’ll be able to adequately protect your business with all the right commercial insurance coverage you need.