Does General Liability Insurance Cover Small Businesses?

General Liability Insurance Cover small businesses from liability to a third party person. If you are an entrepreneur, small business owner, or contractor — you need General Liability Insurance. When it comes to business, aside from having workers’ compensation, you also need to have liability insurance. This insurance could give the business owner assurance and peace of mind because they are covered. The business can be covered if, in any case, a customer incurs an injury during their working operations.

Almost every business needs liability insurance to protect the assets of the company in case an unexpected loss happens. General Liability Insurance is an insurance that could protect the business from some claims. It can provide assistance to the insured against litigation — in case a third party person files a damage claim against the insured. It can also pay a necessary cost for bodily injury and property damages to another person. 

General Liability Insurance Covers Small Businesses

Liability claims are very common to a small business. As of the past years, it is surveyed that in the United States, almost 80% of the businesses experienced liability claims from their customers. Besides, and what’s frustrating  —is that it cost them more than the estimate. Did you know that the average medical expenses of a knee-cup injury claim are $15,000?. Also, an additional $5,000 if the injured files a claim against the business? Could you afford to pay it all on out-of-your-pocket money? Yes, you can — but are you sure that your business will not put in risk of bankruptcy if you pay all those expenses? Let’s help you find a solution to that. Contact us to get information on how to minimize your risk of bankruptcy. 

Does General Liability Insurance Covers Businesses That Are Renting its Space?

Before signing a commercial lease contract —your landlord may require you to provide a proof business liability insurance — so if they ask you about that and your answer is just a blank stare — so you think you could get an approval for your lease? Unfortunately, the answer is No. Almost all landlords require their renters to have commercial general liability insurance — so they won’t be held liable if claims arise from the business operation. Businesses are dangerous sometimes are not, but either way, you need to have liability insurance if your landlord requires you. For example, the activity of the tenant is a firework factory. If business starts a fire and causes injury to others, you may want your tenants to have enough insurance to cover the expenses for the casualties of the other person that is due to their operations. 

What Does General Liability Insurance Cover?

General Liability insurance typically covers the insured company or business from claims. On which the claims involve bodily injury and property damages to others off-your business. However, coverage would only be applicable if the claims happen during the operation of the company, or damages resulting from the products of the business and its services. Besides, it could also cover or pay for the repair of your landlord’s property, if you are held liable for the damages. 

Generally, this insurance does not cover injuries of your employees; you should purchase a worker’s compensation or group health insurance for them to get a benefit. Additionally, it also does not cover damages to the vehicle of the business, so a car insurance policy is also a must. 

General Liability Insurance Covers

  1. Bodily Injury And Property Damages To Others
  2. Medical Payments For The Injury Of Another Person
  3. Products-Completed Operations 
  4. Personal And Advertising Injury
  5. Damages To Premises Rented To The Business

General Liability Insurance Covers a variety of liability damages for the protection of small businesses — but its coverages have limits.

1. Bodily Injury And Property Damages Liability To Others

General Liability Insurance covers incidents related to business operations that result in bodily injury and property damages to a third-party person. This coverage can include events like a customer falling on the premises of the business insured, or slipping due to its newly waxed floor. These scenarios are applicable to coverage but with specific limitations. 

Besides, general liability insurance covers the liability of the business resulting from property damages to a third party person. For example, a manicurist accidentally drops-off a cuticle remover to the expensive bag of the customer — and the customer demands payment for it. 

A roofer accidentally drops a ladder to the windows of the customer, causing the breakage of the window. 

2. Products-completed Operations

General Liability Insurance Covers the liability of the insured resulting from both the products and completed operations of the insured. Products are the goods that the business manufactures, distribute, or sell. If your product causes sickness or injury to the other person aside from your employees — the company can get protection from this coverage. 

However, in the completed operation, it could only protect the insured if the project is fully complete. Iy can cover the insured against faulty work or faulty services claims from another person. For further illustration, suppose that the customer hires a roofer to install a new roof to its old home. However, the roofer didn’t seal the spaces properly, so when the rain comes after a week, it causes a flood to its home. The roofer’s general liability policy can cover up the claims because the incident occurs after he finished his work. 

3. Personal And Advertising Injury

Since not all injuries are just physical. Any verbal or written communications that cause harm to others can also consider as injuries. This coverage could cover the insured against slander, libel, copyright infringement, malicious mischief, and other named verbal liabilities. For example, business ABC a small retail business, suffers from a decrease in profit and a damaged reputation — after its competitor posted a rumor on social media regarding its bad customer service and defective products. Business ABC sues its competitor for personal and advertising injury due to the damages to its reputation and decreased its profitability, because of what they posted on social media. If its competitor has general liability insurance, the cost for settling the legal claims against them could be covered. 

4. Medical Payments

Medical expenses could cover the medical costs until to the extent of the funeral for which the insured business is responsible. However, medical expenses coverage would only be applicable in any case the injured withdraw its legal claim against the insured. For example, the insured is shopping at a mall when one of the canned goods shelves collapsed, which results in broken ribs of the customer. If the total cost of the medical expenses of the customer is $11,000, and the shopping store’s liability limits are $10,000. In this case, the store will be responsible for paying the difference between its policy limits and the total cost of the injured’s medical expenses. 

5. Damages To The Landlords Premises Rented To You

General Liability Insurance covers the insured for any damages to non-owned buildings, structures, or buildings. However, coverage would only apply if the business insured is held legally liable for the damages. For instance, a local firework shop is renting its shop; the local shop starts a fire due to the negligence of its employee, who throws his lighted cigarette butt near the fireworks. General Liability would cover the damages to the rented property since the business caused the fire, which leads to its losses. However, coverage won’t be applicable if the fire starts with a lightning strike. 

What Does General Liability Insurance Doesn’t Cover?

a. Injuries To Your Employees

Coverage for the injuries of your employees may apply only if the business has a workers’ compensation insurance. Additionally, this insurance is required for all states except for Texas. So might as well you purchase this insurance or else authority could fine you $10,000 for not having one. 

b. Owned Commercial Building

If the business owns its properties or its building, it is much better if the business purchases Business Owners Policy. This insurance is a package of liability and property coverage — on which could cover the insured company against property losses. 

c. Professional Mistakes

If your business provides advice or services to people, you have a higher chance of having liability claims against you. So for prior protection, you must consider purchasing a Professional Liability Insurance in any case a customer files a claim against you — that they lose money due to your advice. 

d. Vehicles Of The Business

Commercial vehicles or vehicles that are used for business can have protection by a commercial auto insurance policy. Take note that any accidents that are related to work are not applicable for coverage under personal auto insurance