Are you running a small company? If so, then you know your business is at risk of future litigation every day. That's why it is so vital that you have a general insurance policy for liability.
For paying medical bills and attorney's fees from property harm and bodily injury, just about every form of the company requires general liability insurance.
A large and unforeseen liability could lead to your company closing down operations indefinitely without insurance coverage or significant cash reserves. Read on to learn about some things to know if you are getting a general liability insurance policy.
General Liability Insurance: How it Works
General liability insurance helps cover expensive claims that can arise during regular company activities. You'd have to pay these available liability insurance premiums out of pocket if you don't have coverage, and not many companies have the money to do so.
Liability claims are widespread and can occur during regular business practices. Did you know that a slip and fall claim's average cost is $20,000? And, if you're facing a lawsuit for reputational damages, be prepared for it to be about $50,000.
Coverage
A general liability insurance policy can help cover claims that have been incurred by your business. Someone can sue your company if a customer gets injured after slipping and falling in your shop.
Your insurance policy provides provisions for damages for physical harm, so it will help pay for your medical expenses. The organization faces a chance of causing property damage if you or your staff work at a client's home.
Coverage of property damage liability may help cover repair or replacement costs if someone else's belongings are damaged by your business. Because of something you or your staff have said, anyone may sue your company for libel or slander.
If this occurs, general liability insurance will help to protect your company by covering your legal expenses. For copyright infringement, the company may be sued. For instance, if you use their picture in your advertisement without permission, a photographer can sue you.
Why a Business Needs This
Liability claims are not rare, and they can be costly. In fact, in the next 10 years, 4 out of 10 small companies will likely face a liability claim. The leading cause of emergency room visits is slips and falls.
The estimated expense of a claim of this kind is $35,000. It will increase the average expenditure to more than $75,000 to defend and resolve if an allegation leads to a lawsuit.
Your company will have to pay for these expenses out of pocket without general liability insurance, and that could force you out of business. Any business, big or small, is a risky enterprise.
But, small companies don't often have an adequate cash reserve to face a significant and unforeseen bill, such as liability for an accident, unlike big corporations. For the organization you've worked so hard to create, one single argument can spell trouble.
What to Consider
General liability insurance protects your company for injuries that occur either at the premises of your company or at your client's place of business.
In addition to settlement or judgment fees for damages that you are legally responsible for paying, coverage is included for legal teams representing your company, witness fees, and evidence costs.
It offers compensation, regardless of whether or not they are fraudulent, for expenses involved in defending settlement fees. Because general liability insurance only offers you cover against some forms of lawsuits.
At least every six months, it is essential to check your general liability insurance policy annually to see whether you need to make upgrades or additions. Consider how the insurer will adjust, which means it will also need to change your insurance needs.
Conclusion
General liability insurance is primarily intended to shield organizations from accidents and mishaps that are untimely. While it is not needed by statute, landlords typically request it, and for job contracts, it is also required.
Think of it as a wise investment to affordably safeguard your company, giving you the peace of mind you need to concentrate on running your business.
