General Liability Insurance
General liability insurance is critical for business owners to have for a few reasons. This type of insurance helps protect against certain kinds of personal injury and property damage connected to work.
Who Should Have It?
Both contractors and business owners are encouraged to get general liability insurance to help protect each against lawsuits or court costs associated with an on-the-job injury. If a small business owner decides to forgo liability coverage, then the consequences of a personal-injury lawsuit could be crippling.
Contractors might also be required to have this kind of liability coverage before beginning work for certain employers. In most instances, contractors will only need general liability coverage whereas business owners might require a business owner's policy.
A business owner's policy includes both general liability coverage and property insurance coverage. If, for example, an employee operated a company vehicle and didn't own any commercial property, then that employee would probably only need general liability coverage.
A business owner's policy is designed for small business owners who need property coverage for their commercial properties and general liability coverage for one or more employees on the small business owner's payroll.
How Does It Work?
General liability coverage works like most other kinds of insurance in that the insurance company will pay claims up to the policy limit, and the business owner is responsible for the rest.
As an example, a small business owner would be expected to pay $20,000 if the claims related to personal injury and property damage amounted to $420,000 and the general liability coverage maxed out at $400,000.
Benefits of General Liability Coverage
Since running a business sometimes poses unforeseen challenges, general liability coverage can help business owners combat potential risks. General liability coverage can help cover property damage or personal injury related to a small business owner or his employees.
Coverage limits on general liability policies are normally high to give small business owners or contractors extra protection against possible court settlements or prolonged litigation.
If an employee is driving the company car and gets into an accident, for instance, general liability coverage can help defray any personal injury or property damage claims.
In short, general liability coverage is essential for business owners who need extra protection against personal injury or property damage.