General Liability Insurance for Small Business
General liability insurance for small business owners protects your company against legal damages if you are sued for an action, oversight or mistake that leads to physical or mental harm or loss of property. Because of their size and limited budget, smaller businesses may be especially vulnerable to financial loss if they are sued. In today's society, where lawsuits against businesses are becoming increasingly common, protecting your company against litigation has become a necessity.
Although most of your clients simply want to receive good service or effective products, more small businesses are suffering damages due to customers who are willing to take a business to court for their own financial gain. In some cases, an honest mistake by one of your employees or an oversight in providing a service may result in genuine harm that needs to be corrected. A general liability insurance for small business policy can cover your legal expenses and provide compensation to plaintiffs if they suffer a genuine loss. Better understand your options when you review our liability insurance definition.
What Does Liability Insurance Cover?
Your general liability insurance for small business plan covers bodily injuries, damage or loss of property, libel or slander. A customer or vendor who is injured on your property due to unsafe practices or a hazardous work environment may file a suit for damages. A customer who claims that you provided a defective product that caused an injury may bring a suit against your company. A competitor who can prove that his or her profits suffered because of false advertising that harmed his reputation may have grounds for a libel lawsuit.
If you are sued and the plaintiff is awarded a judgment, your insurer pays for your legal costs. Your general liability insurance for small business coverage also pays to compensate the plaintiff for losses due to your actions or oversights. However, your general liability insurance will generally not cover punitive damages if these are awarded. Punitive compensation is awarded if you committed a harmful act intentionally, and your general commercial insurance provider will not pay benefits for intentional harm.
Bodily injuries may include a physically traumatic event, sickness or death. Humiliation, emotional distress or extreme anxiety may be considered mental injuries. Disparaging publicity, copyright infringement or wrongful eviction from your premises may make you subject to a lawsuit. A comprehensive general liability insurance for small business plan can protect you against these occurrences.
Small business owners have the option to purchase a business owners policy, or BOP, which combines liability coverage with property insurance. Although these plans save you money by combining different forms of protection, they may not be adequate for your liability needs. If you operate a high-risk small business -- one that involves operating heavy machinery, for example, or providing medical advice -- a BOP would probably not meet your needs. A general liability insurance for small business contract would be a safer solution.
Protecting Your Business Against Lawsuits
The best way to keep your general liability insurance for small business coverage affordable is to prevent accidents or mistakes before they happen. Basic, general safety measures -- providing well-lit parking lots that are free from pot holes and broken glass, keeping sidewalks free from snow and ice and cleaning up spills promptly -- can reduce your liabilities significantly. Provide regular safety training sessions for your employees.
If you manufacture a product, practice meticulous quality control. To defend your company against legal action, keep complete, detailed records of any risks that you may have noted. Keep logs of safety inspections and of any actions that your staff took to correct deficiencies. Maintain your manufacturing equipment and monitoring devices in good working order, and note any repairs or service visits.
For smaller businesses, lawsuits can be financially devastating. Your general liability insurance for small business representative can recommend ways that you can increase your safety in the workplace. Ask an expert in commercial coverage how you can protect yourself against litigation.
Affordable General Liability Plans
Compare quotes on general commercial insurance from multiple providers before you make a decision on the plan that's right for your small company. As a small organization, you can't afford to pay high general liability for insurance for small business premiums. On the other hand, the cost of a lawsuit can be even more prohibitive. The fewer claims are filed, the lower your rates will be.
Managing your risks, providing training in accident prevention and installing adequate safety and security equipment throughout your building can help reduce your general liability insurance for small business claims. Having adequate protection in place gives you greater peace of mind and allows you and your staff to do your jobs more efficiently. When you run a safe, properly insured company, your chances of suffering losses due to legal action decrease.