Do all businesses need general liability insurance?
When buying business insurance, you might wonder what to make of the different coverage offered. Many policies sound the same, though they serve different purposes. For example, you’ll likely see several types of liability policies among your options. You’ll almost always see an offering for general liability coverage. It might not seem obvious which policies you need.
What Does General Liability Insurance Mean?
General Liability insurance pays third parties who sustain harm as a result of your mistakes while doing business. Because someone else’s loss might be your fault, then you might have to pay them. The right liability coverage will help you do so.
Most businesses need general liability insurance as a starting point for coverage. The term general doesn’t mean your policy will apply to all the risks within your business. Instead, it covers the liability risks that most businesses (yours included) might face. The policy might pay for:
Bodily injuries to customers
Property damage done to third-party belongings
Personal injuries caused by allegations of libel or slander against another person
Many policies will also cover the legal fees of both parties involved in a liability lawsuit. Additional benefits might also exist, depending on the insurer. However, you might need to augment your coverage with further liability protection. Your business and the liabilities it faces will vary, after all.
Getting Additional Liability Coverage
Not all business liabilities have coverage under a general liability policy. Some have specific exclusions. Others don’t have adequate protection under a standard general policy. A business owner will likely need to augment their policy with other coverage. Some of the policies you might need include:
Errors & omissions coverage that pays for financial harm you cause to clients as a result of your professional services or advice.
Products/completed operations coverage pays when items you make harm someone. Completed operations coverage pays for damage caused when complete work that subsequently fails.
Cyber liability coverage pays when third parties suffer losses because of computer data theft in the business.
Employee theft coverage will pay for losses third parties sustain as a result of misconduct by your employees.
Care, Custody, or Control (CCC) provides coverage with respect to damage to property in your care, custody, or control. In some cases, CCC has been determined to entail physical possession of the property; in others, any party with a legal obligation to exercise care with respect to property has been deemed to have property in its CCC.
Some insurers also buy commercial umbrella insurance. This policy can add extra coverage on top of the limits provided by a general liability policy. You can receive more help in case of severe liability suits.
To get these extra policies, you might be able to add it to your general liability policy as an endorsement. Or, you might have to buy separate coverage. Remember, that your general liability policy might include some of these types of coverage. However, never assume that it does. Instead, consider your general liability coverage the foundation stone to the rest of your coverage.