When you are running a business, you are juggling a thousand hats every day, sometimes dozens at a time. You try to foresee everything that may happen in the nearby future, but accidents can sneak in unexpectedly and have devastating consequences. To avoid the cost of damages that can impact your pocket, it is a smart business decision to carry general liability insurance.
What is General Liability Insurance?
A vague name for an important part of your protection, general liability insurance for small business owners can mean the difference between paying millions in a lawsuit and having that covered. With this coverage, you are safe from unforeseen events like lawsuits, medical claims and legal costs.
An average general liability insurance will cover you for things like injuries on your property, like if someone were to come to your office and trip over your area rug. It also protects from product liability, so if a product you sell caused damage to the purchaser or their property, your insurance would take care of that damage. Additionally, it would cover you from lawsuits claiming slander or copyright infringements, and third-party property damages.
General liability insurance does not cover against any claims an employee might make citing discrimination, worker’s compensation claims, professional errors you may make in your line of business, automobile, boat or other vehicle accidents, or other instances that are covered under the heading of a specific separate insurance.
Read your policy terms carefully to ensure that you have coverage for anything that might pertain to your needs.
Why Do You Need Coverage?
You may think, “Hey, I’m a small business and a good person. I’m not going to get sued!” But even big business companies, like Entrepreneur, warn against the simplest ways to get slapped with a lawsuit.
In their article “Four Potential Lawsuits to Watch Out For in Small Businesses,” Larry Alton warns against the main threats to a small business owner for which general liability would help. Some of these, like employment harassment suits, are not covered, as discussed above.
However, the number two risk of lawsuit is an easy one to accidentally stumble upon – intellectual property rights. In this case, you may inadvertently use another company’s slogan or logo without intent to do harm, but the owner of the image or slogan may seek restitution against you. Innocently done, but with potentially catastrophic consequences, this minor accident can be a huge headache if you don’t have general liability insurance.
No matter how good of a person you are, or how carefully you run your business, any time you deal with other people you are putting yourself at risk of a lawsuit.
How Much Coverage Do You Need?
This typically depends on the type of work you do, and sometimes your client may request that you have a certain amount of coverage.
The cost of general liability insurance varies based on your business and industry. The more at risk you are to a lawsuit, the higher your premiums will be, but you will be able to feel safer knowing that the risks you take are protected.
Peace of Mind Has No Price Tag
Keeping your business running smoothly and ethically can protect you against many occurrences, but when accidents happen, they are usually not foreseen. It’s worth the price tag for the knowledge that those unavoidable instances won’t have the ability to destroy your business because you were protected with general liability insurance.