General Commercial Liability Insurance
General commercial liability insurance acts as a safety net to protect your business against the financial impact of a lawsuit. More and more commercial organizations are recognizing the need for a general form of liability coverage that's separate from their property or worker's compensation policies. As the costs of commercial litigation rise, securing your company with a general commercial insurance plan will give you peace of mind and more inclusive protection.
Since the advent of the internet, large and small business owners alike have been able to gather general business liability coverage quotes quickly and conveniently. To ensure that you choose the best policy for your business, make a number of inquiries with different insurance providers to compare estimates. The more you learn about the pros and cons of general commercial liability insurance, the better prepared you'll be to make an informed decision on this vital component of your business's financial health.
General Liability Insurance Basics
While personal liability insurance protects us against injuries or property damage that occurs in our home or on our private grounds, general liability insurance protects commercial entities against lawsuits related to their property, practices or services. The increasing rate of commercial lawsuits has motivated many companies to expand their liability protection strategy to include general commercial liability insurance.
For some businesses, a business owners policy, or BOP, may be the right solution to cover the general costs of a routine lawsuit. A BOP packages a property policy, workman's compensation and coverage against liabilities in a single plan. Although this arrangement may be affordable and convenient, its liability component could prove inadequate if your business is ever sued for significant damages.
General commercial liability insurance benefits include not only the costs of your legal defense, but compensation that's awarded to the plaintiff, or the person who brings the suit to court. In the case of an injury, acute medical care and rehabilitation costs may become enormous. If the injured party loses the ability to perform his or her job because of bodily harm suffered due to an accident, oversight or mistake, you may end up being held liable for those losses, too.
Even if your business is cleared of any wrongdoing, the costs of your legal defense in a prolonged court case may grow significantly. If a customer or client feels wronged by your practices, he or she may drag out a lawsuit indefinitely, regardless of whether you were at fault. To protect yourself against this contingency, purchase enough general commercial liability insurance to handle drawn-out or frivolous cases. The better protected you are, the more efficiently you can carry out your work.
How Much Coverage Do I Need?
Determining how much general commercial liability insurance you need requires a general evaluation of the risks inherent in your business. If your work involves operating heavy equipment, you may be exposed to more lawsuits than an interior decorating firm, for example. If you have a lot of foot traffic from customers, clients, vendors or sales representatives, the likelihood of an injury increases.
If you operate a busy retail store, talk with your insurance agent about a medical payments policy. These plans pay damages directly to the injured party for injuries that fall below a certain level of expense. In many cases, these plans can prevent a lawsuit. However, a high medical payments limit may make you subject to fraud by people who understand the way these policies work. Filing multiple medical payments claims may also result in higher rates for your organization over time.
You may be at higher risk of having a judgment placed against you if you live in certain parts of the country. Some states have a record of consistently favoring the plaintiffs in commercial lawsuits. Because compensation costs can be very high, you may need more coverage if you live in one of these states. Your general commercial liability insurance representative can advise you of how much additional protection you may need.
Umbrella Coverage for Businesses
Because your policy establishes a maximum benefit that your provider will pay within a given time frame, some businesses elect to add an umbrella plan to their coverage. Umbrella policies cover you against losses that exceed your maximum amount. In some cases, businesses have been required to pay hundreds of thousands of dollars in excess of their policy limit to plaintiffs who were awarded damages. With litigation costs constantly rising, you may want to consider including this option to increase your financial security.
Take the first step in finding the right general commercial liability insurance plan by collecting estimates from a number of carriers online. Don't cut corners on this important aspect of your business's financial plan. When you're shopping for policies, look for maximum coverage for your company at rates that suit your budget.