Over the years, we’ve received a lot of questions about our insurance products. One topic that our business clients often ask us about is General Liability Insurance (GLI): What type of coverage does it provide us? How does it differ from my existing insurance? Is it going to cost me an arm and a leg?
Accidents can happen at any time at a main business location or other venue where an event hosted by a business takes place. For example, a customer might trip and fall and break a leg, arm or even a hip, which results in expenses that they decide to pass on to the business owner who they feel is responsible for their injury. An employee might also back a business vehicle into a pedestrian in a parking lot. Additionally, some consumers and other businesses require that their partners and service providers have this type of insurance.
With General Liability Insurance, a business owner worries less about uncontrollable incidents that could otherwise cost them extreme losses of time and money. Their insurer takes responsibility and covers reasonable costs, such as medical expenses. They also cover costs related to defense in lawsuits by one or more third parties who claim that the business owner or one of their employees is liable for copyright infringement, defamatory statements, damage of property or physical injury. GLI might also cover administrative, court and other fees related to the incident or lawsuit, including the cost of an attorney.
Liability lawsuits can cost a business owner their livelihood. Instead of a facing a bill for a few thousand dollars, they might have to deal with a lawsuit and claim for tens or hundreds of thousands of dollars or more. Without insurance coverage to protect them when liability lawsuits take place, they have to pay everything entirely out of pocket. They also lose money because of the time lost to dealing with a lawsuit and experience heightened stress that can cause them personal medical problems. They might lose so much overall that the cost of a single liability claim forces them to shutter their business permanently.
Instead of taking these risks, a business owner with General Liability Insurance enjoys the following protections:
– Unknown Event Protection: GLI covers a wide range of accidents. It covers not only the events that an owner prepared for, but also ones they never imagined possible.
– Reputation Injury Protection: GLI usually covers when someone claims that a business owner or one of their employees caused them professional or financial harm via a written or photographic advertising or unrelated copyright violation, libel, slander, misappropriation of ideas or invasion of privacy.
– Employee Action Protection: When an employee harms someone, their actions adversely impact their employer, especially if the event occurred at the business location or a business-related event. Personal liability insurance only covers so much. GLI can provide gap coverage.
– Data Theft Protection: Data breaches and associated theft continue to increase year-to-year. When a bad actor, such as an identity thief, a hacker or even a foreign state, steals data kept on company computers or cloud storage, the insurer takes responsibility.
– Property Loss Protection: As the name implies, the insurance company covers claims related to damage or total loss of a third party’s property. GLI also covers rented properties, including rented structures and equipment.
– Physical Injury Protection: GLI covers injuries sustained on-site at the business or in relation to any events that involve business operations. As previously noted, it covers medical expenses as well.
What Doesn’t It Cover?
General Liability Insurance doesn’t cover events already covered by other forms of insurance:
– Service-Related Mistakes: It doesn’t cover losses or claims related to one or more employees making a mistake or committing negligence that results in a substandard product or adverse service outcome. Professional liability insurance covers these types of claims.
– Business Property Damage: GLI doesn’t cover any type of damage or losses that occur related to owned property. It doesn’t cover theft of business property either. Commercial property insurance covers these claims.
– Employee Physical Injuries: Employees who experience illness or injury while working for the business are covered for medical expenses and care by worker’s compensation insurance.
The Cost of Liability Coverage
Some business owners recognize the advantages of investing in general liability coverage, but they feel they can’t afford to pay for it on a monthly basis. They might also feel they can’t cover the cost of a deductible in the event that an incident does happen.
An insurance agent can discuss the coverage options and costs based on the business owner’s unique background. That said, this type of coverage is far more budget-friendly and affordable than the out-of-pocket expenses the business owner potentially faces in the event that they’re found liable after a lawsuit or during a settlement.
A business owner can also report the monthly premium for this coverage as a business expense when filing taxes, which means they can usually write off the expense to help at tax time.
Lastly, they can prevent financial losses and earn money by investing in general liability coverage. If a consumer or another business requires that their partners or service providers carry this coverage and a Certificate Of Insurance (COI), then General Liability Insurance makes it possible for the business owner to retain those relationships. Without it, they lose clients and revenue streams.
Talk to Your Agent
At GEC Insurance Services, our professionals possess the knowledge and experience necessary to discuss accurately General Liability Insurance and other insurance options with you. We can help you choose the right type of coverage to fit your needs. For more information about general liability coverage or to schedule a consultation, contact us today.