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- What is general liability insurance?
General liability insurance is an essential coverage for any small business. It protects your business from lawsuits and financial losses from third parties. If you own a small business, you know that it can be tempting to take risks you wouldn’t do with a bigger corporation.
The downside of running a smaller company is that there are more chances that something could go wrong, which could cause financial losses or even put your business out of commission. Fortunately, there are several types of general liability insurance available at reasonable rates. Keep reading to learn more about what they cover, how much they cost, and who should get them.
What is general liability insurance?
General liability insurance protects your business from lawsuits and financial losses from third parties. Lawsuits are usually filed by people who are harmed by another person’s actions. But you can also get sued.
A client might sue you if they have a bad experience with your business. If you have no insurance, then that lawsuit could be costly, time-consuming, and distracting for your company. While your business is small, it is at a much higher risk of getting sued compared to larger corporations.
Larger businesses have more resources that can protect them from lawsuits. But that doesn’t mean you shouldn’t have liability insurance at all. It is important to have liability insurance because it protects your business from financial losses and lawsuits.
Small business insurance companies
There are two types of small business insurance companies: captive and non-captive. A captive insurance company is owned by your business, which means you contract with them. Non-captive insurance companies are owned by your insurance broker or agent. You usually choose between a captive and a non-captive company based on their rates. But do keep in mind that non-captive companies will offer you more coverage, so it’s up to you to decide. There are a few things to note when choosing an insurance company:
- How soon do you have to file a claim? This is a big factor when choosing an insurance company. Some companies require you to wait weeks before you can file a claim. The longer you have to wait, the higher your deductible becomes, so it’s important to choose an insurance company that allows you to file a claim right away.
- What is included in your rates? Most insurers offer you a variety of different insurance policies. You can choose the one that best fits your needs.
Cheap Small Business Insurance
There are two types of small business insurance policies:
- Business owners policy – A business owners policy is a general liability insurance policy that protects your assets against damages caused by third parties like lawsuits and damages. Most small businesses purchase this policy.
- Professional liability insurance – Professional liability insurance covers your liability if you cause damage to other people or their property. It is usually required for those working as doctors, lawyers, engineers, etc. To get the best deal on a small business insurance policy, you need to shop around.
Compare rates from different insurance companies to find the one that offers you the lowest rates. If you are having trouble comparing rates, don’t hesitate to ask your agent for help.
How to find the best general liability insurance for your business
After deciding which type of general liability insurance is right for you, you need to find a policy. Here are a few things to keep in mind when searching for the best policy:
- What is your coverage amount? A few types of insurance require a higher coverage than others. For example, most business owners policies require a minimum of $100,000 of coverage, but some require a higher amount.
- What is included in your coverage? Many policies will give you the option to choose between various different types of coverage. Some policies, however, are not customizable, so you will have to choose between them.
- Is your agent licensed? Your agent is your business’s representative when it comes to insurance. It is important to choose an agent that is licensed and reputable.
How much does general liability insurance cost?
This is a difficult question to answer because each policy is different. You should compare rates from several different insurance companies to get the best rate. You should also shop around before choosing an insurance company. Remember that the more you know about general liability insurance, the better off you will be. Keep these tips in mind when comparing rates and find the best policy for your business.
- What is your business’s risk? This will help you determine the amount of coverage you need. A low-risk business with low liabilities will cost less to insure than a high-risk business with high liabilities.
- Which state do you operate in? Some states require a higher amount of auto insurance.
- How much do you want to spend? This is your budget. You can always spend less, but you can’t get more than your budget.
Types of general liability insurance
The most common types of general liability insurance include:
- Business owners policy – This policy protects your assets against damages caused by third parties like lawsuits and damages. Most states require this type of insurance. You can get this policy from your insurance broker or agent. You can also self-manage this policy, but most brokers will help you choose the right policy.
- Professional liability insurance – This covers your liability if you cause damage to other people or their property. It is usually required for those working as doctors, lawyers, engineers, etc. You can get this coverage from your insurance broker or agent.
- Auto insurance – This protects you financially if you get in an accident while driving your car. This coverage is typically required by each state. You can get this coverage from your auto insurance company.
- Commercial property insurance – This protects your business’s property in the event of a disaster like fire or hurricanes. You can get this coverage from your insurance broker or agent.
Understanding your coverage options
Some general liability insurance policies come with tons of coverage options, but most only have the most common ones. You will have to choose between the following coverage options:
- Bodily injury – This covers your liability if someone is injured by your actions.
- Property damage – This protects your business’s assets if they are damaged by a third party.
- Bodily injury – – Property damage – – Personal injury – – Medical payments – This protects your business if someone gets injured while using its products or services. – – General – – Umbrella – – Surety
Co-ops and Insurers Cooperatives
Co-ops are nonprofit insurance companies owned by the policyholders. They offer affordable rates, and most of the time, they are required to pay out on claims. In most cases, if you get injured in an accident, you will be covered for your injuries by either your auto insurance or general liability policy.
Co-ops have several advantages over captive companies. For example, if you have to file a claim with a co-op, you don’t have to wait weeks before you can file your claim. You also don’t need to hire experts to file claims.
If you get injured in an accident, you can file your claim online. Co-ops also have several advantages over non-captive companies. For example, non-captives will charge you more for the same amount of coverage. They also have more restrictive policies and will limit your coverage options.
To recap, there are several options when it comes to finding the best general liability insurance for your small business. You can choose a captive or non-captive company, shop around for rates, and choose between several different types of coverage. General liability insurance is essential for every business, but it is especially important for those that operate in high-risk industries.