8 Forms of General Liability Insurance You Need For Your Business!

General liability insurance is one of the most important types of business insurance you can get. Without it, you could be financially responsible for a third party’s medical costs or property damage. You could also end up facing judgments, legal settlements, and lawyer fees that can put a financial strain on your small business. But with the right policy, you can protect your finances and keep your business thriving. 1. General Liability Insurance Coverage General liability insurance covers your business from claims of bodily injury, property damage, or libel that arise from your products, services, or operations. It also protects your business against legal defense costs, judgments, and settlements if you’re sued for damages. General liability policies are usually written on a stand-alone basis or as part of a commercial business owner’s policy. They typically have coverage limits of $1 million per occurrence and $2 million aggregate. In addition, businesses can purchase additional coverage called umbrella insurance. This increases the maximum policy limit, making it easier to pay for costly lawsuits. Small businesses should consider a BOP (Business Owner’s Policy) that includes general liability and other types of insurance to help them protect against disasters, accidents, and lawsuits. For instance, if a customer slips on the floor of your store, your medical bills can rack up quickly. If you get sued for a client’s injuries, it can cost you tens of thousands of dollars to defend the case and settle it. Without general liability, your business could be put out of business due to these costs. 2. Property Damage Coverage Property damage liability is part of general liability insurance, which protects businesses from claims that their work caused physical damage to someone else’s property. This coverage is essential for any business that does work for clients, as it helps cover the cost of repair or replacement for their customer’s property if you accidentally cause damage. For example, if you’re a car wash owner and accidentally swerve to miss a deer and crash into a neighbor’s mailbox, your property damage liability coverage would pay for the cost of repairs or replacement of the mailbox, up to the policy limit you selected. This coverage type also covers the cost of medical bills incurred by anyone who gets hurt while working on your property, up to your policy’s limits. It’s important to purchase the maximum amount of coverage you can afford, as the costs can quickly add up if you’re sued. This is why it’s essential to get an accurate estimate of your net worth so you can purchase the proper amount of liability insurance. 3. Bodily Injury Coverage Bodily injury liability insurance protects you if someone is injured in an accident you cause. This coverage pays for their medical expenses and lost wages, up to your policy limits. It also helps cover legal fees if they sue you for damages, up to your policy limit. Most states require you to carry bodily injury liability car insurance for your vehicle. But, you can increase your coverage to protect yourself and your family for much less than the minimum requirement. Your car insurance premiums are based on how much coverage you select. Most states set a minimum of $25,000 per person, but you can also purchase higher liability limits. This coverage can help pay for the medical bills, lost wages, and funeral costs of other people in an accident you cause. It also covers the damage you do to their property, like a mailbox or home. 4. Advertising Injury Coverage Advertising injury coverage is a component of general liability policies that covers your business against claims of stolen ideas, invasion of privacy, libel, slander, and copyright infringement related to your business’s advertising. These offenses can lead to a lawsuit by the person or company that suffers the damage, which may include financial losses. The most common example of this type of insurance claim is a competitor who uses slander against your business in order to gain an advantage over you. However, other businesses could also make a claim against you if they feel that your business has caused them an injury or loss. In most cases, this type of liability insurance is automatically included in your general liability policy under Coverage B, which is personal and advertising injury liability. The exact details of what is covered will vary depending on your specific policy. While this type of insurance is often considered a good addition to your general liability policy, it should not be taken lightly. The exposures to most of the offenses covered under personal and advertising injury liability (libel, slander, copyright infringement, violation of privacy, and misappropriation of trade secrets) are much greater for media and advertising companies than for other businesses. 5. Professional Liability Coverage If you provide services, like accounting, legal or medical advice, to clients, professional liability insurance can help protect your business from claims of negligence or error. Typically, it also covers the cost of defending a lawsuit. Many companies, including law firms, architecture, and engineering firms, have contractual requirements for professional service providers to carry insurance. They want to ensure they can compete for projects and contracts, and that they will have an extra layer of protection in case something goes wrong. There are two basic types of professional liability coverage. The first is errors and omissions (E&O) insurance. This is most commonly used by attorneys, accountants, and real estate brokers. It can also cover other professionals such as architects, landscape architects, engineers, home inspectors, insurance agents, and management consultants. 6. Business Interruption Coverage Business interruption coverage can help a business get back to work after it temporarily shuts down due to an insured property loss or other covered peril. The policy will replace the revenue the business would have earned during the period of suspended operations and cover ongoing expenses, such as payroll. Insurance policies typically limit the amount of income that can be claimed, so it's important to read your policy carefully. You should also look at the restoration period, which is the number of days your business will be eligible to receive coverage after a covered loss occurs. The cost of business interruption insurance is intrinsically tied to the value of your commercial property and the perils that your policy covers. Businesses that rely heavily on their physical property or have more valuable assets will generally pay higher premiums to ensure they're protected in the event of a covered loss. With the recent outbreak of COVID-19, many California business owners are wondering if their business interruption insurance policies cover them if they have to temporarily close due to a virus. It's important to understand the exclusions in your policy and consult an attorney for advice on whether you can claim losses incurred as a result of a covered disease. 7. Employee Dishonesty Coverage Employee dishonesty coverage is a type of commercial crime insurance that protects businesses against losses caused by criminal acts committed by employees. The policy pays out for theft, embezzlement, and other fraud. It also covers willful damage to property, such as kicking a hole in a wall or smashing a computer. Losses are based on incidents, so if two employees are involved in a theft, it’s considered one loss. This coverage is especially important for companies that handle a lot of money, such as financial institutions and large employers with social security services or retirement funds that they manage. These types of organizations are more likely to be targeted by employee dishonesty because their employees have access to a lot of cash and can easily be tempted to steal or misappropriate it. The cost of this coverage varies from company to company, but it’s essential to understand what it offers and what it excludes. If you’re not sure what kind of protection is best for your business, reach out to U.S. E&O Brokers today to learn more about this valuable coverage and to receive a quote. 8. Cyber Liability Coverage Cyber liability insurance is a type of business insurance that protects your company against losses from a data breach. It covers costs associated with cyber incidents, including lost income, repairing or replacing computer systems, investigating a breach, and notifying customers about the issue. There are several different kinds of cyber liability coverage available to businesses, depending on the size and industry of the organization. For example, some companies buy technology errors and omissions insurance (E&O) to cover the cost of a claim from customers who file an E&O claim because of an error in a software program they purchased from your business. Another kind of cyber insurance is privacy liability coverage, which protects your business from the financial costs of a data breach or violation of privacy laws. This kind of policy can be especially useful if your business stores sensitive customer information, such as credit card numbers, social security numbers, or medical records. Cyber liability insurance is a good idea for any business that handles or stores sensitive information. This includes most businesses that conduct e-commerce or accept credit cards online.