General Liability Insurance: What You Need to Know as a Small Business Owner

The COVID-19 pandemic has affected businesses in a myriad of ways — but one sector that has seen rapid growth, despite the challenges, is small business. According to the U.S. Chamber of Commerce, there was a 24.6% national increase in the number of new businesses started in 2021. Whether by choice or necessity, professionals are making the leap to self-employment in droves. 

Entrepreneurs have a laundry list of processes to secure for a new business, but insurance coverage can often fall to the bottom of the list. Is your business protected against costly claims? We’ll walk you through everything you need to know about general liability insurance: what’s covered and when do you need it?

What’s covered under general liability insurance?

General liability insurance, also known as business liability insurance, is a layer of protection against a variety of claims that have the potential to capsize a small business — your livelihood. These claims generally fall under the following categories:

Bodily injury

Your policy will offer coverage if a customer is hurt in an accident on the site of your business or involving your business. Your insurance can cover medical expenses as well as legal fees in the event of a lawsuit. Not to be confused with workers’ compensation, coverage which provides medical costs for employees in work-related injuries.

Property damage

If a customer’s property is damaged during service, your liability insurance can cover the cost of property repair or replacement. Property extends not only to a home or personal belongings, but also to electronic data.

Product liability

Not all incidents happen on site or at the time of service. Your business could be liable for medical and/or legal expenses in the event that a product causes harm to a customer’s person or property.

Advertising injury

The public-facing nature of business can come with legal consequences in the realm of traditional and digital media. General liability insurance can help pay for legal expenses stemming from slander, libel, or copyright infringement cases.

But my business is an LLC

There’s often an assumption that when a business is registered as an LLC, your personal assets are protected from the obligations of the business. While this is often true, there are instances where you could still be held personally liable if your business and personal assets haven’t been completely separated.

In all likelihood, your personal assets are usually protected through incorporation; however, in the event of an accident or a lawsuit, your business may be liable for associated costs. General liability insurance can cover these legal fees, as well as a variety of claims. What’s more — some employers and clients may require you to carry general liability insurance prior to entering into a contract.

I’m not sure if my business needs coverage

Setting up yet another account for your business can feel overwhelming. Many business owners may even feel as though their business doesn’t have enough reach to warrant special coverage. How do you know if your benefit can benefit from the protections of general liability insurance? Here are some questions to consider.

• Is your business open to the public?
• Does your business advertise or create marketing materials?
• Does your business have a professional social media presence?
• Do you or your employees use social media personally?
• Do you visit third-party locations for business activities?
• Is general liability insurance required for entering into contracts?

If you answered yes to one or more of these questions, your business is considered at-risk to liability claims. Sadly, one lawsuit could dismantle years — even decades — of hard work. General liability insurance offers the peace of mind that your small business can weather otherwise devastating surprises.

Determining the right coverage

Like with many insurance offerings, it can be difficult to know exactly what level of coverage makes sense for your business. According to Insureon, most small business owners pay around $40 a month for general liability policies. The most important indicator to your policy costs is the industry in which your business operates — physical retailers or businesses that involve work on other people’s properties are considered more at risk than remote operations.

Your deductible and premium costs are determined by the limits on your plan. An occurrence limit determines the amount of coverage per incident, while the aggregate limit (twice the occurrence limit) details the total amount of coverage per calendar year. Our experienced agents consider your budget and risk exposure to pair you with the coverage that’s right for your specific needs.

Lindow Insurance can help

We know small business owners have a lot on their plates — that’s why we offer a comprehensive commercial package to shore up your business insurance needs and allow you to focus on the day to day. 

Ready to get started? Our agents are here for you! We’ll sit down with you to determine the right coverage for your business. Get a no-obligation quote today.