What Is General Liability Insurance?
General Liability Insurance
helps cover your business from the cost of some of the most common liability claims. This includes bodily injury to a third party, damage to another’s property and advertising liability claims. This coverage is also known as Commercial Liability and Business Liability Insurance.
General Liability Insurance is one of the most common insurance policies that businesses buy. This is because it helps cover the costs of the most common types of liability claims others make against businesses, like bodily injury and property damage. These types of claims have the potential to be very costly. Without General liability insurance, most business owners would have to pay the cost of these claims with their own business and personal assets. Without insurance, faced with having to pay a significant liability claim, few businesses can survive.
General Liability Insurance (GL) is not required by law, but often businesses are required by clients and customers to have GL as part of a contract to do work. Larger companies typically require smaller vendors and contractors to show proof that they have General Liability Insurance. This is one way larger companies ensure that if a liability claim was made against the hired business, the claim could be handled and the hired company could continue to fulfill their contractual obligations.
What Does a Business Liability Policy Cover?
General Liability Insurance helps protect businesses from the costs of common liability claims. These can include claims of:
Bodily injury or property damage claims that your business may have caused someone bodily harm or damaged someone's personal property.
Reputational harm claims of malicious prosecution, slander, libel, wrongful eviction, violation of the right of privacy, and more.
Advertising errors claims of copyright infringement in your advertisements.
How Much Does General Liability Insurance Cost?
The average cost for a General Liability Insurance policy is between $500 and $600.2 There are several factors that may help determine how much a business pays for General Liability Insurance. These factors include:
Condition of the building where the business is located
To give you a better idea, here are the average annual General Liability Insurance rates for some popular industries:2
Hair Salon/Barber Shop: $450 annually
Small Retail Store: $875 annually
Computer Repair Service: $375 annually
A Step by Step Guide to Obtain Small Business Insurance
Buying small business insurance can be daunting. But The Hartford makes it easy. We offer a broad array of coverages so you can tailor your business insurance solution to address the specific needs of your company. And our online quoting platform is incredibly simple to use. In one sitting, you can research your coverages online, get an online quote, and buy the protection your business needs.
Step 1: Gather the required information and documents
It’s helpful to gather the necessary information before beginning the quoting process. Here’s some of the information you may need to provide:
The number of employees working for your company.
An estimate of the business's revenue for the upcoming year.
Basic contact information for you and the company.
Information about what work your business does and its risks.
Your business’s location.
Details about your business premises.
How long you’ve owned the business.
Step 2: Find a broker that specializes in commercial insurance or contact the insurance company directly
If your situation is more complex and you need help selecting the right type of Commercial General Liability Insurance
, contact an insurance company or broker. An insurance broker is someone who works with a buyer to find the right types of insurance coverages for their needs. They also suggest limits for policies and who to buy from. When a customer buys insurance from a broker, part of what they are paying for is the broker’s services.
You can also speak directly with the insurance company. Most insurance companies have specialists that can help you select the right types of coverages for your business. They’ll ask questions about your business such as: how many employees you have; your business location; the type of industry you’re working in and more. With that information they can help you choose the coverage and limits that are right for your business.
Step 3: Review your business characteristics and determine your insurance needs
Different businesses require different types and levels of coverage. A hair salon and a graphic design firm both probably need several similar, key coverages and then some others that differ and address more specific threats to their individual businesses. For example, they may both need General Liability, Professional Liability and Property Coverage. But the graphic design firm might also need Commercial Auto Insurance to cover employees who drive to meet with clients. The hair salon may not need Commercial Auto Insurance. But it may need Business Interruption coverage to help protect it against income loss if they must shut down temporarily due to a covered loss.
If you need advice on how you may best protect your business from the risks it faces, The Hartford can help. Our insurance professionals are available by phone to speak with you about you can protect your business. They can help you tailor your coverage to address your business’s specific risk exposures.
Step 4: Evaluate options and choose the right General Liability policy for your business
There are several variables to consider when buying a General Liability Insurance policy. Cost is important. Besides the types of insurance and the coverage limits you choose, how you pay your premiums and whether you bundle two or more commercial policies when you purchase can also affect how much you pay for your GL premium. Typically, paying for your policy up front in an annual lump sum can save you money. Insurance companies often offer discounts to customers who pay the entire annual premium upfront. Likewise, if you bundle your General Liability Insurance with other business insurance coverages or purchase a Business Owner’s Policy - which combines Commercial General Liability and Business Property coverage in one convenient policy - you are likely to enjoy significant savings compared to if you buy the coverages separately. Insurance companies often offer discounts to businesses that bundle their insurance policies.
It’s also important to review an insurance company’s claims rating. The last thing you want when you’re dealing with a small business emergency is to be put on hold for hours and deal with bad customer service. This can often make or break a small business’s relationship with their insurer. Always check to make sure the insurer you plan to work with has both excellent customer service and claims’ service experience ratings.
Step 5: Relax knowing you have the protection of a commercial general liability policy
Liability claims are becoming more common these days. Customer slip and fall accidents are the most common general liability claims made against small businesses. The average cost of a claim like this is $30,0003. Few small companies are able to manage a cost like this without a significant disruption to their business. With the right general liability coverage, you can be confident knowing you have taken the necessary steps to protect your business from the costs of the types of liability claims it’s most likely to see.