Don’t Let Liability Coverage Gaps Sink Your Small Business

Don't Let Liability Coverage Gaps Sink Your Small Business
The long-term success of a business depends on more than just profitability from day to day; right or wrong, the reality is that lawsuits can cripple a small business or even force it to permanently shut its doors.
Thus, carrying the right kinds of insurance policies should be considered part of the basic costs of doing business. An unforeseen insurance gap, combined with an accidental injury or property damage incident, could leave your company liable for more than it can bear.

What Is General Liability Insurance?
In Florida, as in most other states, workers comp insurance is mandatory; and you can’t legally go without commercial auto insurance for any fleet of commercial vehicles your business might have. And most business owners are also quick to insure their commercial property as well.

But there is one more form of commercial insurance that most businesses should have: general liability insurance.

General liability insurance covers many of the liability gaps left by other essential insurance types. The central coverage areas for general liability are: accidental injury of clients or other non-employees on your business premises and accidental damage to customers’ property, by an employee in the course of doing his job.

Additional areas of cover include: legal expenses incurred in defending yourself against a relevant lawsuit, punitive damages, suits for false or misleading advertising, libel/slander, or copyright disputes, and damage done by tenants to your rental property.

How Much General Liability Coverage Do I Need?
How much protection you need on your general liability policy will vary greatly from business to business.

The first major factor to consider is simply the business-type involved. A construction contractor company, for example, will often need a lot of coverage since every job is potentially riddled with dangers. There are even special general liability policies tailor-made just for contractors because their risk levels and risk types are so unique.

On the other hand, a small Web design firm might not need as much general liability cover; but the risk of being sued for allegedly giving bad advice or breaking a contract is still there, and clients could possibly visit the business site and get injured. So, at least some general liability coverage is still needed.

A second important factor in determining how much general liability coverage to buy is your business’ location. Some states have the tendency to calculate damages higher than others, even for the same exact type of claim.

Finally, if you are going to buy commercial property insurance and general liability insurance (and perhaps other commercial insurance types as well), you can often get a better deal by “bundling” them into a single Business Owner’s Policy (BOP). If you can’t get sufficient liability coverage in the bundle deal, however, you might need to also buy an “excess” or “umbrella” policy to make up the difference.

To learn more about how to build a commercial general liability insurance that will meet the exact needs of your business, contact Flagler County Insurance Agency for a free initial consultation.