Entrepreneurs and business owners are a unique breed. Masters of their trade and self-assured enough in their abilities to break out on their own and offer a good or service to the public in the hopes of starting a profitable business. It is not an easy undertaking, and it is challenging enough to be an expert in your industry. What most new business owners discover on the fly is that running a company involves much more than just having a great product or skill set. There are many areas you might not be very knowledgeable about, and that is where a great risk of failure lies. The faster you as a business owner recognize this, the better, and finding seasoned experts in that particular field to assist you along the way is the greatest method to overcome these factors. This will enable you to focus on growing your core line of business.
Naturally, risk management and properly protecting their company against potential catastrophic financial loss is one of the most common issues we see a lot of entrepreneurs struggle with. Any successful, seasoned corporate executive will tell you that putting out fires is something they do all day, every day. With so many potential problems, effective risk management is crucial to achieving your goal of owning a prosperous business.
This blog and the few that will come after are meant to serve as a crash course in business insurance. Enough to give you a knowledge base that you feel comfortable approaching an insurance professional and having a productive conversation to get your business properly protected against loss. Without further ado, we present to you, Business Insurance 101: The General Liability chapter.
What is General Liability Insurance?
A Commercial General Liability (CGL for short) policy safeguards your business from financial harm in the event that you are held accountable for property damage, bodily injury, or advertising injury (Libel, Slander) brought on by your products, activities, or personnel. General Liability is designed to protect against non-professional negligent acts. (We will cover Professional Liability in the next chapter)
Prime examples of what a CGL will cover include:
- A customer visiting your business slips and falls and ends up hurting themselves.
- As a contractor, you accidentally damage the electrical system in a customer’s house which requires a full system replacement
- While leasing out their space, a restaurant owner experiences a kitchen fire. The property owner ends up suing for the damages.
- Working in a customer’s house, you accidentally knock down and damage a valuable antique.
- A corporation files a lawsuit against you alleging copyright infringement after you launch a marketing campaign for your business.
The examples above show that general liability will shield you from a variety of situations. Since every company is unique and faces a different risk, it would be hard to give examples from every industry in one sitting. However, discussing your business and its risk specifically with a dependable advisor will help you obtain a more clear understanding.
What Does General Liability NOT Cover?
General liability insurance is a crucial component of adequately protecting your business. However, it does have some limitations on what it will cover. In order to provide a full range of protection, there are various policies designed to function in tandem with your general liability.
This issue, in my opinion, is equally crucial to discuss as the topic of what is covered under a general liability policy. When you are aware of the coverage deficiencies in your policy, you can take steps to reduce your risk of catastrophic financial loss. Below are a few examples of what general liability won’t cover and the types of coverage you can obtain for the particular hazard. We’ll make sure to discuss each one individually in a future post.
- An employee suffering a workplace injury (Worker’s Compensation)
- Auto related incidents (Commercial Auto)
- Professional Errors/ Faulty Workmanship (Professional Liability)
- Damages to your own property (Business Property/BOP)
- Data Breach/ Cyber Attacks on your Business (Cyber Liability)
- Intentional Acts (Sorry, no coverage for damaging something on purpose)
How Can I Purchase General Liability Insurance?
The best course of action when looking to purchase a general liability policy is to contact an independent insurance agent. An independent agent will have access to numerous carriers and help find the correct fit for your specific business insurance needs and provide proper advising. Experienced agents will also be able to assist with risk mitigation by highlighting potential exposures you may be unaware of that might make all the difference in the world.
Contact any of the professionals at The Staples Agency when you’re prepared to speak with an experienced business insurance advisor. We are passionate about insuring and protecting businesses and that is the kind of teammate you want in your corner.