What Is General Liability Insurance: How to Buy Business Insurance
Most businesses have general liability insurance because accidents happen. They happen even more the bigger your company is. Say, for instance, that you had a meeting with some clients and someone tripped over a handbag on the floor that belonged to one of your employees. If they got hurt, you'd be protected with this type of coverage. If you own a yoga studio, you certainly need this coverage in case a student gets hurt in class. In fact, it would be up to you, as the owner, whether or not you require that your yoga instructors carry their own general liability insurance too. Other professions that benefit from having a commercial general liability policy in place include personal trainers, plumbers, architects, carpenters and real estate professionals. Pretty much any business that is exposed to bodily injuries should have adequate coverage. Next time you shrug it off and say, "Who needs general liability insurance?" remember that more people need it than you'd think. The list of jobs that require general liability insurance keeps growing. And according to Insurance Journal, the average paid liability claim is $15,000 so it's better to be safe rather than sorry. If you don't have the right coverage, a settlement amount may be garnished from your paychecks!
How Do I Know if I Need General Liability Insurance?
Your employer will tell you verbally or it may be written in your contract that you need to be protected with this type of coverage before you begin work. Contractors on construction sites are often required to buy commercial general liability insurance in order to start a job. Information Technology (IT) people, too, are required to have a business liability insurance (electronic data liability). Most hairdressers need to carry this form of insurance too (no, it doesn't cover a bad haircut, which would be covered by professional liability insurance.).
What Does General Liability Insurance Cover?
As the name of the product "general liability insurance" suggests this form of insurance protects you and the client if you cause any damage, whether it be bodily damage or damage to the client's or other's property. Most employers require general liability business insurance and in some fields of work, it's required by law. For instance, if you are a contractor in the construction industry, you'll be required to have general liability business insurance for contractors even if your employer doesn't ask for your general release of liability form.
General liability also protects your client if your work somehow causes any damage to a third party. For instance, let's say that you did some contract work to an office building and there was an accident that is being blamed on the way you did the floors. If you have general liability insurance your client and you will be protected if anyone takes legal action. It's also important to note that your defense bills will also be covered by this type of coverage.
You are also protected if, say, you're a carpenter doing work at an office building. While on the job, if you drop something on the Xerox machine and break it, you'd be covered for repair or replacement if you carry general liability insurance.
What Doesn't Commercial General Liability Insurance Cover?
General liability insurance does does not protect your own property. It also doesn't cover vehicles and boats, so if your business involves the operation of a truck, car or boat, this insurance won't protect those assets. Let's say that you own a food truck. Your truck will not be covered by general liability insurance but if it somehow causes damage to another person's property, you may be covered. If you're an electrician and your work causes injury to someone, you're also covered for paying their medical bills, but you're not covered if you hurt yourself.
How Do I Buy Commercial General Liability Insurance?
You have two ways of getting general liability insurance and each has its pros and cons. Sometimes, an employer/client will add you on as an additional insured. Sometimes, the client may put you on their policy as an additional insured but it's more cost effective for the client to ask that you buy your own general liability coverage.
If this type of insurance is required of you before you begin work, you can buy a competitive rate for general liability insurance quotes by visiting here. You always want to shop rates or have a trustworthy source like SmartFinancial help you compare quotes before you choose.
What Is Advertising Injury?
Marketing professionals need commercial general liability insurance too or else the company employing marketing professionals needs it. For instance, let's say that you hired a copywriter for your agency and that person created an advertising campaign you thought was great. After it aired, another company brought a claim against your company because they used the idea first. If that person's claims are legitimate, you'd be covered by general liability insurance. The same is true if you infringe on a copyright or slogan.
Most companies that advertise are prone to having a claim brought against them for a variety of reasons. With so many project managers, barbers, beauticians, estheticians and even engineers vying for the same wording for their products or services, advertising injury claims are more common than ever.
Will My Defense Bills Be Covered?
Many professions are prone to lawsuits, including writers, spas, therapists, counselors, salons, insurance agents, accountants, real estate agents, photographers, computer programmers and more. If you fall into any category of professions that is similar to the ones listed above and you are working as a consultant or freelance, it's important to keep in mind that general liability insurance will cover legal fees. Even if the claim against you is groundless, you will still need defense, which can cost lots of money. A small business can easily eat its profit fighting charges without the right insurance coverage.
Why Should I Also Buy an Errors and Omission Insurance
Errors and Omission (E&O) is a type of coverage that can help alleviate some problems for you professionally. In any position where you can be accused of negligence or doing inadequate or sub-par work, you can be sued. E&O is especially beneficial if you are a contractor, freelancer or a business owner of any kind.
For an example of how E&O provides protection, let's say you're a computer programmer or an IT professional in charge of a client's website. If the website gets attacked by hackers and there is a data breach, you may be held liable because you were negligent in securing the website's data. Errors and omission insurance would cover legal bills that a general liability insurance policy alone would not cover.
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