How Does Commercial General Liability Insurance Protect My Business?

How Does Commercial General Liability Insurance Protect My Business?

Are you in the process of opening a new business? It’s normal to be overwhelmed during this process as there is a long checklist of what is needed. You’ve probably nailed down your branding, your goals, your space, but one of the not-so-fun, but critical tasks that can seem daunting is choosing your business’ various insurance plans.

General liability insurance is a basic type that is required for most businesses. Still, before choosing it, it’s critical to understand what it is, what it covers, and what it doesn’t cover.

Commercial general liability insurance covers plenty of financial liabilities, such as property damage, bodily injury, medical payments, among the many. However, the coverage depends on the policy you decide on, but generally, commercial general liability insurance policies usually include the following:

1. Bodily Injury Liability

A general liability insurance policy covers damage done to a third-party at the fault of an employee in part of an act of non-professional negligence. This goes beyond physical harm to include mental trauma and emotional distress.

Legally, the business owner is responsible for the damage since the accident happened on their premises and because of an irresponsible employee. However, the price depends on the severity of the injury. Your policy can cover medical expenses, rehabilitation costs, and compensation wages while they’re out of work.

2. Property Damage Liability

Property damage is the sixth most common business claim filed by small businesses. As with bodily injury, if property damage occurs on your business premises to someone else’s belongings, you will be responsible for paying the loss. 

Let’s say you’re a general contractor; you may experience accidents. For example, if you accidentally drill into a water pipe, general liability insurance would cover water damage to your client’s floors, walls, windows, etc. This type of insurance would cover all costs associated with fixing the problem, including the price of a plumber, replacing any materials damaged, professionally drying the space to prevent mold, and taking care of the displaced client if needed.

3. Medical Payments

In the event of a client or customer slips and falls at your business location or hurts themselves on your equipment, you are liable to pay the compensation. 

A general insurance policy covers all medical payments for all injuries that occur within your business premises, including ambulance, medical, professional nursing, or surgical services, as well as funeral expenses.

The main difference between bodily injury insurance and medical payments is medical payments can occur without legal action or defense as it is no-fault coverage.

4. Personal and Advertising Injury

Personal and advertising injury insurance covers situations that can be difficult to identify and prove, as the damage can be either physical, psychological, or financial. Legal action is almost always necessary in this case.

This coverage type protects in several different scenarios, including:

  • Slander
  • Libel
  • False arrest
  • Copyright infringement
  • Use of another’s advertising idea
  • Malicious prosecution
  • Wrongful eviction, entry, or invasion of privacy

How to Get Complete Coverage

Although commercial general liability insurance does cover a variety of liabilities, it may not cover all.

  • Personal Injury to EmployeesA pizza delivery joint sends out many delivery boys per day. One of the boys trip and falls down the stairs while in their own restaurant. Suppose your employees face an accident while on your premises, general liability insurance cannot help you. This is where workers’ compensation insurance policies come into play and cover their medical fees and provide compensation for their wages.
  • Damage to Your Property – If you’re running a trendy restaurant and there’s a break-in, your general insurance policy won’t help. You can choose property policies, such as a burglary insurance policy to cover the damage done to your premises. It covers the actual loss that you face, such as monetary damage as well as destruction caused to your property.

Consider Choosing Several Options

General liability insurance can protect your business by offering coverage for a huge variety of liabilities and possible incidents. However, it may not be able to cover expenses for all situations. Consider professional liability insurance to protect you from negligence caused while performing a service and a business interruption insurance policy to keep you prepared for the future.

Your business may not need every single business insurance policy available. Make sure to choose policies that suit you and your business’s needs. This way, you won’t lose money on a policy that you will never use, and you can save money, should any lawsuits arise.