Are you suffering from a financial crisis due to claims made by others against your business? If yes, then General Liability Insurance Coverage is here to cover your financial expense.
General Liability Insurance is one of the most well-known protection arrangements that businesses purchase. This is because general liability insurance coverage includes the expenses of the most common kinds of risk claims others make against businesses, like bodily injury and property harm. These sorts of claims can prove to be very costly. Without General liability insurance, most business owners would need to pay the expense of these claims with their own business and personal assets. Hardly few businesses survive when confronted with paying a critical liability claim.
So, for owners of any business, liability insurance is a crucial investment. This insurance provides you protection if any injury or mishap happens in your working environment, or if a worker causes a physical issue or mishap. Certificates of general liability insurance, demonstrate that you have insurance coverage in case of an accident.
The article explores general liability Insurance definition, general liability insurance coverage, and general liability insurance cost in depth.
Table of Contents
- 1 General Liability Insurance Definition
- 2 When do small businesses need general liability insurance?
- 3 General Liability Insurance Coverage
- 4 What Does General Liability Insurance Not Cover?
- 5 How Much Does General Liability Insurance Cost?
- 6 What is a Certificate of Liability Insurance?
- 7 How to Get a Certificate of Liability Insurance?
- 8 General Liability Insurance For Limited Liability Companies (LLC)?
- 9 The Perils of Not Having General Liability Insurance
General Liability Insurance Definition
General Liability Insurance is characterized as insurance protection for third-party property harm or individual/promotional injuries supposedly brought about by you or an employee. General liability insurance coverage is also referred to as Commercial Liability and Business Liability Insurance.
General Liability Insurance (GL) isn’t legally necessary, however, most of the time GL is a requirement by clients and customers as a component of the contract that needs to be fulfilled to start work. Bigger organizations regularly require sellers and contractual workers to show confirmation that they have General Liability Insurance. This is one way bigger organizations guarantee that if a liability claim was made against the recruited business, the claim could be dealt with and the employed company could keep on fulfilling their contractual obligations.
When do small businesses need general liability insurance?
Most entrepreneurs buy general liability insurance soon after they start a business. Circumstances that drive entrepreneurs to get this policy include:
Applying for a professional license. Real estate agents, dentists, and accountants need a license to practice in the United States. The requirements for a license could include general liability insurance.
Signing contracts with larger companies. A company that hires a general contractor, engineer, or landscaper to complete part of a larger project may require you to get this policy.
Signing an office lease. An architect, electrician, or another professional who rents an office or workspace may need to obtain general liability insurance to fulfill the lease requirements.
General Liability Insurance Coverage
General Liability Insurance shields businesses from the cost of common claims. These can incorporate cases of:
- Real injury or property harm asserts that your business may have caused somebody’s physical injury or harmed somebody’s very own property.
- Reputational harm claims of malicious prosecution, slander, libel, wrongful eviction, violation of the right of privacy, and more.
- Advertising errors claims of copyright infringement in your advertisements
When considering general liability insurance for LLC, be sure to take a look at your business’s specific risks and plan your insurance coverage around that.
What Does General Liability Insurance Not Cover?
General liability insurance does not cover:
- Losses or injuries caused by your negligence
- Your personal or commercial property
- Your personal vehicles or boats
- Breach of your confidential personal information
- Professional services provided to a client
- Injuries or disabilities among your own employees
- Intentionally caused damage or injuries by you
How Much Does General Liability Insurance Cost?
The average general liability insurance cost ranges between $500 and $600. However, there are several factors that may influence how much a business pays for General Liability Insurance. These factors include:
- Business location
- Condition of the building where the business is located
- Industry type
To give you a better idea, here are the average annual General Liability Insurance costs for some popular industries:
- Hair Salon/Barber Shop: $450 annually
- Small Retail Store: $875 annually
- Computer Repair Service: $375 annually
What is a Certificate of Liability Insurance?
A Certificate of Liability Insurance is a document that demonstrates your business has general liability insurance or another sort of risk protection. General Liability Coverage ensures that your business is protected in case of a mishap or injury caused in your working environment or brought about by one of your employees. The certificates show some of the policies’ most significant information. This can include
- The type of coverage
- The coverage limits
- The issuing insurance company
- The policy number
- The expiration date
- What the policy actually covers
- And any additional insured
They are normally one page long in length. They show that your business does have the coverage it needs to run safely.
How to Get a Certificate of Liability Insurance?
The process to obtain a certificate of liability insurance seems daunting. To make it easier for you we have broken down the process into a three-step guide that can help you get your certificate of insurance to whoever is requesting it promptly.
Step1: Know the Minimum Requirements
Prior to requesting a certificate of insurance from your insurance provider, it’s critical to comprehend the reason behind the request. Certain third-parties ask for a certain amount of coverage before they can extend to you an employment opportunity. For instance, a business may require you to have a liability policy limit of $1,000,000 prior to finalising a contract with you to redesign a huge business building. Get the base prerequisites recorded as a hard copy so that you are aware of the requirements for the job.
Step 2: Know About Your General Liability Insurance Coverage
In case you’re worried about whether you meet the base prerequisites set by the third-party in question, review your policies or contact your insurance agent. You’ll need to ensure you have all of the coverage you require, and that your policy limits meet the requirements. On the off chance that you don’t have the required coverage, you’ll need to decide if it is worth expanding your insurance for the job. Incase if you do choose to buy more coverage, the initial step is to contact your insurance agent to talk about your options.
Step 3: Request Your Certificate of Insurance
When you comprehend the base requirements and are certain you meet them, here’s how to get a certificate of insurance . Contact your insurance agent and give the individual or company needing to be listed as certificate holder, as well as their address, insurance requirements, and any contact information. You should be able to get the certificate fairly quickly after your agent has reviewed the information and has made sure that you meet all the coverage prerequisites.
To dive into more details, you’ll need to provide your insurance company with certain information about yourself (the insured) so they can confirm your coverage and the third-party (the certificate holder).
- Your contact information
- Your policy number
- The certificate holder’s name
- The certificate holder’s contact information, including their address, fax, and/or email
- The information of any other individuals or companies that need to be listed on the certificate
- The job site and project information
- A copy of the insurance requirements or contract, if available
At some instance, you’ll be asked to provide a client or another third-party with insurance proof. For this purpose, a certificate of insurance is the best way for you to prove that you’re insured and have the coverage you say you do
General Liability Insurance For Limited Liability Companies (LLC)?
On the off chance that your business possesses real estate or other valuable assets, general liability insurance is a highly suggested investment. The normal price of premiums falls somewhere in the range of $300 and $1,000 every year dependent on your coverage needs and type of work. Liability insurance can shield your business from the financial burden of prosecution, which can undoubtedly cost tens to countless dollars.
Considering the low cost of premiums, a general liability insurance for LLC is a little cost to pay for the security and peace of mind it offers.
The Perils of Not Having General Liability Insurance
Judgments, settlements, legal defense fees and court costs can be extremely costly. If someone files a claim against your business:
- You’ll need legal counsel, which can cost over $100 per hour.
- Costs could easily exceed $75,000 if the claim ends up in court.
- You may need to spend several thousands of dollars, even if lawsuit gets dropped.
After adding the cost of administrative work, legal secretaries and any settlements or judgments, your business could face a bill totaling hundreds of thousands of dollars. The right general liability insurance for LLC can help you to cover these costs by protecting you from the aforementioned claims.