When Do I Need General Liability Insurance?

When Do I Need General Liability Insurance?
Of all commercial insurance types, aside from those you’re legally required to have like workers comp, general liability insurance (also called “business liability insurance”) is easily the single most important.
But while almost all businesses would do well to invest in a general liability policy, there are also specific “red flags” that may indicate your business has a special need for this type of coverage.

Here are 5 key situations where you should definitely consider covering yourself with commercial general liability insurance:

1. Lots of Direct Customer Interaction
If your clients typically visit your business office or you frequently visit them at their homes, that means the potential for accidental injury to a client or accidental damage of a client’s property is very real.

It may be different if most of your clients are contacted only online or over the phone, but face to face, direct customer interactions on a regular basis always increases your liability risks for third-party bodily injury or property damage liability – which is what general liability specializes in!

2. Access to Clients’ Expensive Equipment
An auto mechanic, a mobile IT repair professional, and many other business professions involve working not only around clients, but also working directly on their very expensive equipment.

Any mistake at all, any accidental damage (or even claimed accidental damage) to customer equipment of this kind can bring demands for expensive reimbursements or even a lawsuit.

General liability will cover you here on legal expenses and judgments – though not for intentional damage to customers’ property or for any punitive damages.

3. Frequent Use of Rented Facilities
A good general liability policy will not only protect you from potential lawsuits for accidents occurring on company property or on clients’ property – but also if the accident occurs on property being rented by your business.

Plus, most policies also include cover for damage to the rental property itself. This is hugely important to architects, contractors, landscapers, and many others who are constantly moving about and renting out buildings temporarily for business purposes.

4. Your Business Specializes in Marketing/Consulting
Anytime you are representing another business entity by advertising for them or giving the legal or other consultation services, you are at special risk of tort actions based on (real or supposed) misrepresentation or failure to give sound advice.

This is where general liability’s advertising errors and reputational harm coverage comes into play. You can also get professional liability insurance to bolster your defense against such lawsuits – but general liability helps here too.

5. Required to Have General Liability
You won’t be legally required to buy a general liability policy by state or federal law, but the fact is, many businesses are required by contract to have it. And if they don’t, they either lost the contract or commit breach of contract.

This is especially the case with construction contractor businesses, but contractual requirements for general liability may often exist for almost any business-type.

If you are in an industry where most of your work is done by contract, then chances are, you need to have general liability cover or you simply can’t work.

To learn more about what general liability insurance does and does not do and who should invest in it, or for a free, no obligation quote, contact Flagler County (FL) Insurance Agency today!