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What Are the General Liability Insurance Class Codes?

Fran
Lucy Lazarony December 3, 2020

If you have general liability insurance for your business, you have a general liability class code assigned to you by your insurance company. A general liability class code is a group of numbers that insurance companies use to classify businesses into categories of risk. These class codes help insurance companies assign rates and exclusions. Different types of businesses carry different kinds of risks. General liability class codes allow insurance companies to group insured businesses based on the type of work that the business performs. For example, an accountant is at risk to cause errors that might harm a client’s business. While a carpenter might be at more risk for personal injury in his line of business. These general liability insurance customers would be grouped in very different general liability class codes, based on the services they provide and the risks and hazards associated with their business.

Exclusions to General Liability Insurance Policies

Insurance companies use general liability class codes to deny certain coverages. These exclusions limit the insurance company’s coverage for certain activities. Be sure to find out the exclusions to your general liability policy. You want to be crystal-clear as to what is covered by your policy and what is excluded.

Denied and Approved Coverage

Depending on the general liability class code assigned, a business client could be denied coverage. And approved clients may have their insurance rates assigned based on general liability insurance class codes.

Where Can I Find General Liability Class Codes?

You can find general liability class codes at the insurance agency associations in your state. They may be difficult to read, however. So reach out to your insurance agent for assistance.

Why Are General Liability Class Codes Important?

Making sure the right class code is assigned for your business ensures your business is properly insured and quoted the right rate.

What Is General Liability Insurance?

General liability insurance covers personal injury, property damage and other types of bodily harm resulting from the operation of a business.

General liability insurance is typically structured to cover financial settlements as well as legal costs involved with defending lawsuits. Events covered by general liability insurance include accidents and injuries that occur on business property or stem from its business operations, medical payments for minor injuries sustained by visitors to company properties and liability damage to another’s property in the course of doing business.

How General Liability Insurance Protects Your Business

Wondering if you need general liability insurance for your business? Here are two examples of events covered by general liability insurance.

At your business office, a customer slips and falls. This potential lawsuit is handled by your general liability insurance and not out of your own pocket or business savings.

A lawsuit is filed claiming an advertisement for your business has misleading information. General liability insurance would cover the expenses of this lawsuit.

In both of these instances, general liability insurance would step in and cover these events and claims.

Another Insurance Coverage Option

A general liability insurance policy covers many things but it doesn’t cover everything. Another important insurance policy to have for your business is business property insurance, which is also known as commercial property insurance. Business property insurance helps to protect your business whether you own or rent your business property.

Business property insurance protects a number of items in your office including personal property items, tools and equipment, inventory stored at your office or warehouse, furniture including couches, desks, chairs and tables, the computers you use to run your business, accounts receivable and other important documents and outdoor landscaping such as signs and fences.

Coupled with general liability insurance, business property insurance provides a good level of insurance protection for your business.

Reassess Insurance Needs

Each year, take the time to review and reassess your business insurance needs. As your business changes and grows so should your insurance. So reach out to your insurance agent and discuss any changing needs.

Looking for a better deal with your business insurance? Don’t be afraid to shop around. Compare business insurance rates from several different insurance companies. SmartFinancial makes this easy to do. With SmartFinancial, you’ll get business insurance rates from companies near you in no time. SmartFinancial has access to more than 200 insurance companies so you are bound to find the coverage and rate that you are looking for.

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