What is General Liability Insurance and Why Do Businesses Need it?

Insurance

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Running a business requires a lot of support and services from external companies. One of the most significant services every company requires is insurance. 

There are many different types of business insurance out there, ranging from sector-specific options to insurance policies that every company needs to have.

Among the latter category is general liability insurance. As the term ‘general’ in the name might suggest, this is a generic form of insurance that covers a wide range of issues that almost any business might encounter. 

If you’re unsure of what general liability insurance is and why your business needs it, then keep reading this handy guide to find out more. 

What Does General Liability Insurance Mean?

The term general liability insurance refers to policies that protect your business in the case of property damage or illness, or injury as a result of an accident that might have been caused by your company, it’s services or products, or a member of your team. 

This includes incidents such as slips or falls in your workspace and injuries resulting from using faulty products that your firm supplied. 

Depending on the terms of your policy, it may also cover you for damage to your landlord’s property if you rent your commercial workspace. 

General liability coverage protects you against lawsuits from members of the public who are visiting your premises or using your products. 

You can also take out other kinds of liability coverage to protect your business against lawsuits from employees or shareholders. 

What Kinds Of Businesses Need General Liability Insurance?

In the USA, it’s advisable that any business takes out general liability insurance. Even if your team works remotely, there’s still a chance someone using your products and services will be injured and require medical care, which they may expect your business to cover. 

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Also, if your business has a physical location, then you need to make sure that you’re covered in case an accident occurs, particularly if the general public has access to it. Even if they don’t, a freak accident such as a falling sign or faulty wiring could result in damage to property and harm to people, and your company could be liable. 

Therefore, almost every type of business requires general liability insurance. It’s easy to get business liability insurance today, so you can ensure that you’re covered for any eventuality. These policies are great for ensuring that your team and shareholders feel safe in the knowledge that if something bad happens, your company won’t have to foot the whole bill. 

After all, medical bills alone can run to tens of thousands of dollars, and many businesses, particularly start-ups, can’t afford to pay them. General liability insurance will cover you and help you to deal with any claims that might arise. 

Is General Liability The Same As Business Insurance? 

Business insurance and general liability insurance are two very different policies, but they can sometimes be purchased in tandem from the same insurer. 

Normal business insurance covers your company for any accidents, natural disasters or employee-related issues. For example, if your company’s offices were devastated by a flood, then this would be covered by your business insurance policy. 

General liability insurance covers your company for its responsibilities towards the public and those using its products and services. So, if something happens for which your company is liable, then your general liability insurance will cover you. 

Most companies choose to have both of these types of insurance to reduce the chances of an unexpected event of any kind from causing them issues. 

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In many cases, companies have to have some form of insurance in order to take out business financing and to apply for relevant licenses. 

So, when you’re shopping for business insurance policies, you should explore not only traditional cover, but also extras such as general liability insurance. 

As the two policies are both linked to accidents and businesses, they can often be purchased from the same insurance company and you might get a discount for taking out two policies from the same provider. 

Therefore, when you’re buying insurance for your company, you need to check out the options available to you and find one that is both cost-effective and beneficial to your organization. 

Conclusion 

With the modern world so keen to assign blame and so expensive, keeping your company safe from any unexpected bills or liabilities is crucial to your firm’s ongoing success. 

As this article highlights, general liability insurance is crucial for almost every business operating in today’s corporate landscape. It’s vital if you want to ensure that your company isn’t left devastated by a lawsuit. 

If you don’t have general liability insurance for your business, then you should explore the options and use this article to help you find the perfect policy for your company. 

You’ll then be able to get on with the important role of driving your business to success, safe in the knowledge that you’re covered in case of an accident or issue beyond your control. 

Article and permission to publish here provided by Grace Murphy. Originally written for Supply Chain Game Changer and published on June 2, 2022.

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