Many people start their small businesses with high hopes and few fears. The last thing they consider is that a lawsuit could impact their business. That's something that happens to those big businesses.
As it turns out, the answer is no. In 2016, Bolt Insurance Agency reported that one out of every three small business owners has either been sued or threatened with a lawsuit. Most of these lawsuits came against businesses with revenues under $1 million.
Lawsuits take a toll on any business's finances. That's one reason why business owners purchase general liability insurance.
The best general liability insurance for small business owners can cover legal fees that face their companies. It can also handle several other threats that arise in a business.
General liability insurance is often a mystery for new business owners. Fortunately, it doesn't have to stay that way! Discover more about how this policy can protect you in this general liability insurance guide.
When business owners ask, "What is general liability insurance (GLI)?" they usually mean, "Do I need this policy?" The answer is always a resounding yes. General liability insurance is a crucial component of any company's insurance plan.
Why is it so essential? GLI policies protect your business from claims that your company caused bodily injury or property damage. Without this insurance, you'd have to pay the fees associated with these claims out of pocket.
This description may not clear up every question, though. You may still wonder what specific accusations from which this coverage can protect you. Some of these include:
We'll explore each of these accusations in a little more depth below.
Have you ever walked into a coffeehouse and seen a sign that said, "CAUTION! Cups are HOT!" You may think this fact obvious, so why would you post a sign about it?
The answer is to protect that business from liability. In 1994, a famous court case called Liebeck v. McDonald's Restaurants came before a jury. In this case, a 79-year-old woman spilled dangerously hot coffee from McDonald's in her car.
The spill gave her third-degree burns, requiring skin grafts for her thighs. A jury awarded her $3 million in court because of McDonald's coffee serving temperatures at the time.
This case perfectly exemplifies how a business (or its product) can cause third-party bodily injuries. Fortunately, your company can avoid paying these legal fees out of pocket with general liability insurance.
This damage usually affects businesses that work at a client's house. For example, you may run a landscaping company.
If your employees damage a client's car while cutting the grass, it constitutes property damage. General liability insurance can cover the repair fees in scenarios like these.
Somebody can sue your business for libel or slander because of something your employees say. Please note that this does not cover slander or libel against your company. Another type of insurance called professional liability coverage offers this protection.
Finally, your business can also face lawsuits for advertising improprieties. One example of this is infringing copyright when displaying images for an ad. This coverage can be crucial for companies that advertise over social media.
As you can see, general liability insurance covers many threats to your company. However, no general liability insurance advice is complete without discussing what this insurance won't cover. So, let's discuss some of these outlying concerns.
First, general liability insurance does not protect your employees from injury on the job. Likewise, it won't protect your property if an employee or third-party damage it accidentally.
Instead, this insurance only protects you from third-party claims against your company. As we've mentioned before, the same holds for reputational damage. This insurance can only protect you from lawsuits in which you've slandered another party.
Finally, this insurance cannot protect you from legal costs accumulated from an in-house lawsuit. For example, let's say an employee sues your business for wrongful termination. General liability insurance cannot cover these legal fees.
In other words, general liability insurance cannot provide for several crucial in-house needs. So, how can you get these protections while receiving the coverage that GLI provides?
General liability insurance provides several crucial protections for a small business owner. However, it also leaves out many other considerations that could impact your company. So, how can you find the best coverage for your business that covers all of these eventualities?
The short answer is to get a bundled insurance policy with a reputable provider. Many insurance companies offer "business owner policies."
These policies are actually a bundle of different insurance coverages that protect your business. In many cases, these include:
Bundling these policies offers comprehensive protection to your company. Also, receiving this protection from one insurance provider makes managing your coverage simple.
Please note that you can also purchase additional insurance coverages from companies. Insurance companies won't limit you only to what their business owner policies include.
Finding the best general liability insurance for small business protection can take some work. However, as you can see, this coverage is critical for any small business.
So, look for an insurance provider with a robust business owner policy. This policy should include GLI and other essential insurance coverages.
Then, compare prices between different providers. Search for the policies that best fit your company's budget.
We've spent twenty-five years providing the best-customized policies for our Massachusetts companies. We offer several policies, ranging from general liability to vehicle insurance. Contact us today to build the policy your business needs!