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How Does General Liability Insurance Reduce the Threat of a Lawsuit?

September 5, 2022 / By: Stampede Insurance Team
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Blog
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How Does General Liability Insurance Reduce the Threat of a Lawsuit?

Having general liability insurance coverage saves you from unfortunate and unforeseen accidents, like one of your customers slipping and injuring themselves within your business premises. Or if an on-site mishap caused your client's property to be damaged.

How would your small business be affected by this? There's a high chance you would be sued for damages. If your business lacks sufficient revenue or savings, you could be liable for millions of dollars in damages—unless it is therefore important that you have general liability insurance coverage.

What is General Liability Insurance?

Sometimes called business liability insurance or commercial general liability insurance, this usually protects businesses from a variety of potential lawsuits.

It helps safeguard you and your business from having to pay financial liability for damage caused to another person's property, body, or reputation.

Why Should You Get General Liability Insurance?

Coverage for general liability protects you from costly claims that may occur during common business situations, like:

  • Your company or your employees representing a client
  • Meeting face-to-face with clients
  • Assisting or working on the property of someone else
  • Using third-party locations for business purposes
  • Promoting your business

This coverage may also be required if your clients request it. It is common for them to ask about general liability coverage before they sign a contract with your company. Commercial liability insurance can be proven with a certificate.

Is General Liability Insurance Required by the Law?

A general liability policy is usually not required by state law for business owners. Nonetheless, the best thing you can do is to get liability insurance. If you do not have coverage against customer lawsuits, your business' finances and personal assets may be at risk.

However, understanding your state's insurance laws is crucial. Get the right business liability insurance for your business by working with a local agent or a trusted commercial insurance company.

What are the Dangers of Not Having General Liability Insurance?

Expenses associated with court costs, judgments, settlements, and legal representation can be staggering. In the event that someone files a claim against your business:

  • Attorney fees can cost more than $100 per hour.
  • If the claim is filed in court, the maximum amount could easily exceed $75,000.
  • Even if the lawsuit is dropped, you may have to spend thousands of dollars still.

If you include the costs of administrative work, legal secretaries, settlements, and judgments, your business could be facing a bill of hundreds of thousands of dollars. But with the right general liability policy, it can cover legal defense costs for your company.

What Does General Liability Insurance Cover?

In order to protect their companies, many small business owners carry general liability insurance. You might wonder, what is the general liability coverage? Basically, it protects your business against claims such as the following:

Bodily Injury

A bodily injury that may have been caused by your business can make you financially responsible, this can include customer slips and falls. Having commercial liability insurance can help cover their medical expenses.

Property Damage

Property damage that is caused by employee accidents, such as breaking a client's windows while working on their property can be insured under this policy. In the event that the windows need to be repaired or replaced, this insurance can help cover the costs.

Personal Injury

Libel, slander, or advertising injury is a form of personal injury. In such instances, general liability policy can help cover the defense costs of your business if you are sued for something.

What Does General Liability Insurance Not Cover?

You should be aware that business liability insurance does not cover every type of claim. For some businesses, different types of coverage will be needed to provide them with more protection.

The following are some things that general liability insurance won't cover for your business.

Commercial Auto Accidents

A commercial auto accident caused by you or your employees while driving for work is not covered by general liability insurance. Commercial auto insurance coverage can help you cover the costs of damages in this case.

Small businesses without company-owned vehicles may also benefit from hired and non-owned auto coverage.

Employee Injuries or Illnesses

This business insurance does not cover employees’ work-related injuries or illnesses. In the event of a work-related illness or injury, workers' compensation insurance provides benefits to your employees to assist them in recovering.

For example, it can help employees with expenses related to their medical bills and ongoing care.

In addition to these incidents, a general liability insurance policy does not cover the following:

  • Property damage incurred within your own company
  • Mistakes or errors in your business operations
  • Claims that exceed your liability limits
  • An intentional illegal act or wrongdoing was done by you or your employees

How Much Does General Liability Insurance Cost?

You can expect to pay a few hundred dollars to a few thousand dollars a year for your business insurance, depending on several factors. A big factor is the type of business you run. Businesses in higher-risk industries pay a higher general liability insurance premium than those in lower-risk industries.

A construction company, for instance, is likely to see higher insurance quotes and pay a higher rate than a consulting firm. There are other factors that can affect the rate of liability insurance for your business, including:

  • Age
  • Location
  • Number of employees
  • Office building condition
  • Details of the policy, such as the coverage limits and deductibles
  • Insurance claims history

Protect Your Business with Stampede Insurance Services!

Getting insurance quotes is the best way to determine the cost of your commercial general liability insurance. It is possible to tailor your policy based on your specific needs.

Ensure your business is protected with liability insurance by working with a trusted insurance company.

Since 2010, we've been operating as an independent insurance agency. Having been in the industry for more than a decade, we have the specialized knowledge you need and access to some of the most respected insurance companies in the state.

Our company is licensed in several states and serves clients throughout the country. Protect your business by getting a general liability insurance quote today! Contact us at 888-476-0696 at Stampede Insurance Services today!

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