General liability insurance protects small business owners and their businesses against common risks and 3rd party claims. Those include things like advertising injury, customer injury, and damage to customer property.
It’s important for defending against lawsuits and ensures that you qualify to work with partners, sign contracts, and even sign leases.
What is general liability insurance coverage?
Insurance plays an important role in our modern world. Small business owners should carry several different lines of insurance, including general liability insurance.
Why would a small business need general liability insurance?
Simply put, it is insurance coverage for some of the more common risks a business incurs during normal operations. If your team is working at a customer’s home installing new carpeting and one of the workers knocks something over and breaks it, your general liability insurance will pay for the damages.
That’s just a basic example. Commercial general liability insurance is also necessary for other instances, like signing a lease on a new location or signing a work order contract. Sometimes lenders require a general liability insurance policy to be in place before they’ll extend funding.
No, most states don’t mandate general liability insurance for small businesses. However, they may require businesses within specific, high-risk industries to carry it. These can include the following:
The industries listed above are just a few of the many that often require general liability insurance under state law. You’ll need to know the specifics in your state.
However, even if your state doesn’t mandate general liability insurance coverage for your business, it may still be a good idea – or even necessary to operate.
For instance, did you know that clients, vendors, mortgage companies, landlords, and even online sales platforms like Amazon can require that you carry general liability insurance before they’ll work with you?
It’s all about peace of mind. That lender or landlord wants to know that if you get sued, they won’t find themselves paying the costs. General liability insurance delivers that protection.
At Kickstand Insurance, we believe that all businesses benefit from carrying general liability insurance. It’s an important layer of protection between your business and common risks you’ll face during daily operations.
However, some businesses have a greater need for this protection than others based on their operations, how their services are delivered, and other factors. To determine whether you need general liability coverage, answer the following questions:
If you answered “yes” to any of those questions, then you need general liability insurance. Even if you didn’t, it’s still a smart purchase.
Speaking of costs, how much does general liability cost for the average small business? There is no one-size-fits-all answer here.
Your costs vary based on quite a few factors, including the amount of coverage you purchase, the number of employees working for you, where you’re located, your industry, and specific risk factors you face.
On average, small businesses pay around $42 - $72 per month for general liability coverage. However, Kickstand can help you save substantially. It takes just 5 minutes to complete our online form and get you a no-obligation quote. One of our insurance experts will also help you fine-tune your coverage to ensure you’re fully protected while minimizing your costs.
General insurance for business can cover many common risks your company faces each day. That can include the following:
As you can see, general liability coverage offers wide-ranging protection. However, it is not the only type of insurance you’ll need. Some of the areas it doesn’t cover include the following:
Have you missed a deadline? Did a service go undelivered? Professional mistakes are not covered by general liability insurance. You’ll need professional liability insurance here.
While general liability insurance will cover customer injuries, it does not cover employee injuries. That’s where your workers’ compensation policy comes into play.
You’ll need a property policy which can often be found in a BOP, also known as a business owner’s policy to pay for stolen or damaged business personal property (property owned by your business).
Damage to a business vehicle your company owns is covered by commercial auto insurance, not general liability insurance. Damage caused by a vehicle not owned by the business but being used for business purposes such as an employee’s car can sometimes be protected with Hired & Non Owned Insurance which can typically be added to a General Liability policy.
Yes! Independent contractors provide essential services across a wide range of industries and, like any other business, can be sued. General liability insurance provides protection and peace of mind for these professionals just like it does for small businesses and even larger firms.
Of course, there’s a lot of ambiguity here. For instance, why might a general contractor without a physical location, expensive equipment, or physical products need this type of insurance?
After all, without a physical location, you don’t even need commercial property insurance. Without a traditional business structure, you might not need a business owner’s policy.
All of that is true, but if you’re in business and provide services, interact with customers, or advertise your offerings, you can still be sued. Defending against that risk is the entire point of general liability insurance.
What if you can’t afford a policy of your own or it doesn’t make sense to pay for one outright? It’s possible to ask a client to add you to their policy. This arrangement offers the coverage you need without the costs of buying your own policy.
Of course, doing that will increase your client’s premiums, so you’ll need to offset that by paying the difference in the increase.
Determining how much coverage you need can be tricky, particularly for small business owners and independent contractors. There are two ways to do this:
While there is no single answer that fits every business’s needs, the average for small businesses is $1 million per occurrence / $2 million in aggregate. This type of policy will pay out up to $1 million in a single instance but is limited to $2 million for the policy’s lifetime, which is usually a single year.
High-risk and high-revenue businesses should consider increasing their coverage. This can be done through umbrella insurance.
Note: Many business owners attempt to reduce their insurance costs by setting a high deductible. The problem is that if the deductible isn’t affordable, you may not be able to use it. That negates the protection offered. Make sure your deductible is affordable so you can use it when necessary.
Obtaining general liability insurance is relatively simple but may require time and effort. You’ll need to work with an agent and it’s often wise to shop around to find the best deal. That usually means getting multiple quotes and then studying each line on the various policies to ensure that you’re comparing apples to apples.
At Kickstand Insurance, we believe in offering affordable protection you can rely on. Getting a quote is simple and fast – it takes just 5 minutes to complete our online form and one of our commercial insurance experts will contact you to fine-tune your coverage.
Getting a quote on general liability insurance will require some basic information, including the following:
Ready to get started? Complete our online form now! You’ll receive your no-obligation quote quickly, and we can usually provide coverage on the same day. Most traditional agents can take weeks to finalize coverage and provide your certificate of insurance (COI).
No, it does not. If your business owns an automobile, you’ll need commercial auto insurance to cover this type of liability, as well as auto accidents and related concerns.
All businesses face the risk of interruption due to natural disasters, emergencies, and other unforeseen circumstances. General liability insurance does not protect against this. You’ll need a business interruption policy, often part of a property policy.
Yes, general liability insurance covers property damage if someone from your business damages a customer’s property. However, it does not cover damage to property that your business owns. That protection comes from a property policy which is often part of a business owner’s policy.
If an employee is injured on the job, you’ll need a workers’ compensation policy. General liability insurance does not cover workplace injuries. Kickstand Insurance can provide affordable workers’ compensation protection for small businesses in almost any industry – get a free quote in just minutes!
Yes, your general liability policy will cover personal injury to a customer. This is an important consideration for any small business, as well as for subcontractors and independent contractors.
While clients, vendors, suppliers, and business partners might require you to have general liability insurance before they’ll sign a contract with you, this insurance does not protect against a breach of contract lawsuit. That type of protection comes from professional liability coverage, also called errors and omissions insurance.
Yes and no. Subcontractors should carry their own general liability insurance. A small business’s policy will cover the business and that business’s employees but doesn’t usually extend to subcontractors hired by the business. However, contractors’ general liability insurance usually does cover subcontractors, although it can be costly for the business in question. It’s usually more affordable to require all subcontractors you hire to provide proof that they have general liability insurance.
No, these are two different types of insurance. General liability insurance would cover your business against a customer’s slip-and-fall accident, but hazard insurance would protect against theft of equipment that the business owns.
While they are similar, public liability insurance and general liability insurance are not identical. Public liability insurance protects your business against claims from the general public. General liability insurance, on the other hand, offers broader coverage and is a better fit for modern businesses.
Both general liability insurance and professional liability insurance are important for small businesses and independent contractors. General liability insurance covers physical risks, like property damage. Professional liability insurance, on the other hand, protects against things like errors or omissions in service delivery.
General liability insurance does not cover workplace injuries to employees. Instead, your business will need a workers’ compensation policy. Most businesses in the US are required to carry workers’ compensation, with some exceptions. Note that these exceptions vary by state and by industry. It’s important to know the rules that apply to your business. However, we recommend that all businesses, independent contractors, and even sole proprietors carry workers’ compensation insurance.
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