‘Small businesses’ come in all shapes and sizes. From a 400 employee retail chain to a 5 employee coffee shop and everything in between, no two are alike. But one thing that all small businesses have in common is a need for comprehensive insurance coverage – in the event a third-party injury occurs at their place of business.
While large businesses with deeper pockets and vast assets face a risk of financial losses in the instance of an accident, the risk for a small business is even greater. Smaller businesses are more likely to close down altogether after having to pay out for damages, injuries, and lawsuits that result from a third-party injury.
What Does General Liability Cover?
At any given time, a single accident could result in a costly lawsuit.
In the event that a person who is not an employee (third-party person) brings a lawsuit against your business, general liability insurance offers coverage.
General liability insurance benefits may cover:
- Third-party property damage or injury resulting in lawsuits
- Medical expenses for third-party injuries occurring on your business premise
- Product liability lawsuits
- Advertising injury lawsuits
Why Do Small Businesses Need General Liability?
The most basic insurance coverage that every small business owner needs, general liability protects businesses from having to foot the bill should an accident involving a third-party occur in the workplace.
Instances where general liability insurance may provide coverage include:
- A customer sustaining an injury at your place of business.
- An employee causing accidental property damage while performing their job.
- Your product causing harm to a customer.
- Your online advertising bringing a claim of copyright infringement.
General liability insurance helps protect you from the legal costs of defending yourself against these types of allegations and more. Your policy could cover not only attorney’s fees, court fees, out-of-court settlements, and judgments, it could also help pay for immediate medical expenses for third-party personal bodily injuries.
Avoiding a General Liability Claim
Accidents are going to happen sometimes. It’s not a matter of if, but when. However, there are some preventative steps you can take to hopefully avoid your small business having to make a claim on your general liability policy:
Create a culture of safety in the workplace: Make safety a priority in your workplace. Encouraging employees to take care of equipment and the environment can help reduce the likelihood of many kinds of accidents.
Take care when marketing your business: Be sure you and your employees don’t do anything to inadvertently damage the reputation of a competitor or client. If you do, you could be on the receiving end of a lawsuit for libel, a written defamatory statement, or slander, a spoken defamatory statement.
Don’t copycat: It’s simple - make sure that you have permission to use the music, videos, images, writing, and content that you’re using for business purposes.
Be careful with customer property: If yours is a business that deals with customer property – jewelry repair, car detailing, etc. – be sure that you have policies and procedures in place to assure that it is returned to them in better condition than when you received it.
While the above precautions do require some time and effort, the payoff of avoiding a claim on you coverage is worth it when you keep your premiums low.
Not Covered By General Liability
The following items are not going to be covered under your general liability policy:
- Intentional Damage to Property
- Injured Employees
- Damaging Your Own Property
- Cyber Attacks
- Professional Errors
While the above few items are not covered by a general liability policy, the vast majority of third-person damages and injury are. Be sure your business is protected from having to pay for hospital bills, lawyer fees, court fees, and judgments, should a third-party injury or lawsuit occur.
The goal of every small business is to not only keep your business alive but to also watch it thrive. With this foundational business insurance policy in place, you can have peace-of-mind knowing that, should an accident occur, your bottom line will be protected and business can keep moving forward.