Owning a business can be incredibly rewarding, but it also comes with risks. Some of these risks exist regardless of your industry. For example, every business faces some risk of clients being injured on their property. Other risks are industry-dependent. For example, tree removal companies risk damaging clients’ homes with their equipment.
No matter how careful you and your employees are, you cannot remove all risks from your business. That’s why general liability insurance exists, and it’s why every business needs to carry a general liability policy.
What Is General Liability Insurance?
General liability insurance is a policy that protects you — or more specifically, your business — from claims that you caused damage to another person or that person’s property. Without insurance, the costs of these claims can be incredibly high.
For example, if someone were to slip and fall in your store, they could face hundreds of thousands of dollars in medical bills. Without insurance, your business would likely have to cover those bills. Many businesses are forced into bankruptcy in this way. Thankfully, with general liability insurance, you don’t have to worry about this outcome.
What Does General Liability Insurance Cover?
Before purchasing general liability coverage, you should discuss your business’ needs and operations with an insurance broker. They can review various policy options and ensure you purchase a policy that offers adequate protection for your industry. Policies vary to some degree, but general liability insurance typically protects your business against three key risks.
Accidents happen. Sometimes people trip in a parking lot and break a bone. Other times, customers bump into shelving and get a concussion. While it may initially seem like these injuries would be the customers’ fault, people injured on others’ property are often quick to file a personal injury lawsuit. They can argue that negligence on the part of your business contributed to their injury. For instance, they may claim that they only tripped and broke their ankle because you failed to maintain the parking lot.
Personal injury lawsuits can be incredibly expensive to navigate. Even if the judge ultimately rules in your favor, you’ll have legal costs to cover. General liability insurance protects you against this risk. If you are sued for a personal injury, the insurance will pay out on the claim. Your policy should also cover your legal costs and associated court fees.
If you or one of your employees causes damage to the property of another business or person, it makes sense that you’d be liable for that damage. For example, if an employee runs into a customer’s car with a forklift, your business is responsible for paying for repair or replacement costs for that vehicle. General liability insurance will cover these costs on your behalf. Most policies are in effect whether the damage happens on your own property or on a client’s property.
Personal liability issues come up a lot in businesses that transact with other businesses. Another business owner may argue that something your business did or said slandered their reputation and cost them sales. They can sue you for related damages. Luckily, if you have general liability insurance, your insurer should pay out these claims and cover related legal expenses.
What Doesn’t General Liability Insurance Cover?
There are some risks that come with owning a business that are not covered by general liability insurance. You can insure against most of these risks with other types of business insurance.
Business Property Damage
General liability insurance covers damage your business causes to others’ property, but it does not cover damage to your own property. For this, you need a commercial property insurance policy.
If an employee is injured on the job, their medical bills and related expenses become your responsibility. Workers’ compensation insurance will pay for these costs so you don’t have to. Most states, including Florida, require employers to carry workers’ compensation insurance for their employees.
Professional Service Errors
In some professions, a mistake or error made in the services provided could have huge ramifications for clients. This is a common issue in medical fields, for example. You may need additional insurance to protect your business if a client were to sue for damages caused by your errors. Doctors, for instance, need to carry medical malpractice insurance. Professional liability insurance exists for many industries. An insurance broker can help you determine whether your business can benefit from this coverage.
General liability insurance is a “must-have” for every business. If you’re looking for business insurance in Florida, contact Flagler County Insurance Agency. Our independent brokers will assess your needs, help you find the best policies, and ensure you have the coverage you need to manage your risks.