General Liability Insurance for Small Business Owners

Posted on May 29, 2024

Operating a business comes with inherent risks, and for small business owners, these risks can have an outsized impact. Something as routine as a customer slipping and falling in your store can quickly spiral into expensive legal fees and damage your company's public image. General liability insurance is essential coverage that protects your business assets and finances when the unexpected happens.

As a full-service insurance agency with over 70 years of experience, Conner Insurance partners with CEOs, executives, and business owners to provide customized protection. We take a holistic approach, getting to know your company culture and goals so we can recommend a policy to properly safeguard your finances. Keep reading to learn what a general liability insurance policy covers, how to shop for the right policy, and why business owners trust Conner Insurance to secure their company’s future.

What Is General Liability Insurance Coverage?

General liability insurance is a type of business insurance that protects against third party bodily injury and property damage claims. It shields your company from the high costs of liability lawsuits, out-of-court settlements, and legal fees.

Comprehensive policies cover day-to-day business operations along with product manufacturing, events, and services offered to customers and clients. Having adequate limits ensures you won’t have to pay costly judgements or settlements out-of-pocket, preventing financial devastation.

What Does General Liability Insurance Cover?

A general liability insurance policy helps safeguard small businesses from the majority of legal allegations brought on by members of the public. Common examples include:

Bodily injury from slips, trips, and falls on your business property
Customer injury due to an alleged product defect
Property damage such as knocking over an item at a client site
Personal and advertising injury claims like libel, copyright infringement, or misappropriation

Quality coverage takes care of legal defense expenses in addition to any settlement or court award costs. Without protection, these types of situations could lead to expensive attorney fees and tarnish your reputation.

The Importance of Comprehensive General Liability Insurance

Given today’s increasingly litigious environment, general liability insurance is practically indispensable for small and mid-sized business owners. It prepares you for worst-case scenarios so day-to-day operations aren’t derailed by an unexpected lawsuit.

Financial Protection From Damages and Legal Charges

The prospect of facing a liability lawsuit is daunting for any business owner. Even frivolous complaints require time and money to address. General liability insurance cushions your finances so you have legal backing along with funds to cover judgements. This prevents potential company bankruptcy from legal allegations. At Conner Insurance, we customize an affordable plan so your enterprise stays stable.

Enhancing Your Business Reputation

Frivolous lawsuits and poor reputations go hand in hand, whether claims have merit or not. Our coverage includes legal defense fees so we can protect your good name. You also have access to our risk management tips and certified insurance advisors, so future incidents that lead to legal action are minimized. We take a proactive approach, regularly evaluating risks and providing actionable recommendations tailored to your business needs. Our goal is building a lasting partnership so you feel fully supported and protected.

Requirements by Clients, Landlords, and State Laws

Many small business owners first seek general liability insurance because it’s required by third parties. Landlords often stipulate tenants carry liability coverage naming them as an additional interest. By being named as an additional insured, the landlord would be provided some of the same benefits and protections provided by the tenant's liability policy.

Large corporate clients mandate their vendors hold general liability policies before allowing work on their property. This provides recourse and financial protection in case vendor negligence onsite leads to property damage or bodily injuries. Additionally, some states require specific limits and types of coverage to legally operate.

Factors to Consider When Choosing an Insurance Provider

Not all insurance companies operate alike. As a business owner, you need an advisor who takes time to understand your operations and goals to find the right plan for your business. There are some considerations to make as you shop providers.

Common Terms to Know When Shopping for Coverage

Like most insurance policies, general liability plans contain industry vernacular that can make grasping concepts tricky. We clarify key phrases to know as you evaluate plans and quotes:

Premium: The upfront cost paid for coverage
Deductible: What you pay out-of-pocket before insurance kicks in
Aggregate limit: Total amount the policy pays over the entire term
Occurrence limit: Max amount paid per incident
Bodily injury: Physical harm to a person caused by the policyholder's negligence
Property damage: Physical damage to or destruction of tangible property due to the policyholder's negligence
Personal injury: Extends coverage options to include personal injury claims like libel, slander, and copyright infringement
Additional insured: Other parties added to the policy that are also entitled to the liability coverage
Subrogation: The insurer's right to legally pursue a third party responsible for a loss paid by the policy

Understanding these terms allows an accurate comparison of rates, terms, and coverage from different insurers.

What Information Do You Need to Get a Quote?

To generate an accurate general liability insurance quote, agents require details on your business operations, assets, locations, and more. Having the following data ready helps speed up the process:

Company entity structure (sole proprietorship, partnership, corporation, etc.)
Industry/NAICS code
Years in operation
Locations you occupy
Number of employees
Past liability claims and loss history
Other insurance programs carried

This gives us a starting point to craft initial general liability insurance policy recommendations that we can later refine based on your risk exposures.

Understanding the Policy Terms and Conditions

Like most agreements, the fine print contains vital information. Key sections to review in your liability contract include:

Covered business activities
Designated locations where coverage applies
Policy limits and sublimits
Any exclusions or restrictions
Endorsements enhancing or restricting protection

Thoroughly vet proposed plans so you recognize potential coverage gaps to address through added endorsements. As your trusted insurance partner, Conner Insurance guides you through the fine print to identify any risks not addressed. Our advisors explain exclusions and recommend tailored endorsements to provide comprehensive protection for your business. We are invested in fully securing your company's finances and operations.

Evaluating the Cost and Benefits

The amount of coverage your business requires hinges on your risk profile and state regulations. While leaning toward higher limits is preferable, this increases the policy premium paid. We teach clients methods to balance protection and price:

Match coverage territory to where you actively conduct business
Set realistically high deductibles to lower the premium
Discuss bundling options for additional savings
Enhance policies with useful endorsements over maximum limits

Secure the Future of Your Business With Conner Insurance

At Conner Insurance, we become trusted advisors to business owners nationwide by taking a customer-centric approach. Our knowledgeable advisors specialize in small-to-mid-market firms across diverse sectors, equipping us to handle unique exposures. Core advantages we offer include:

Handling the quote process start to finish using top-rated carriers
Advising on real risks to coverage, not just selling bigger policies
Offering objective insights as an independent insurance agent
Custom-tailoring plans aligned to your actual operations
Providing interactive risk management education

We aim to secure your finances while forging a lasting business relationship. Reach out today to learn more and experience the Conner Insurance difference.

FAQs

What is the difference between general liability insurance and errors and omissions insurance?

General liability insurance covers third-party incidents like customer injuries or property damage that occur due to alleged negligence. Errors and omissions insurance handles first-party claims directly from your client for mistakes or inadequate work. Many small businesses need both protections.

Does general liability insurance cover employees getting injured on the job?

No, worker’s compensation insurance specifically covers employees getting hurt while working. We recommend combining general liability coverage with worker’s comp for complete protection.

What happens if I get sued for more than my policy limits?

Your general liability insurance will pay up to the stated occurrence and aggregate limits listed on your policy. Any amount awarded over this would need to be paid out-of-pocket by your business. This underscores ensuring adequate protection limits.

Does general liability insurance cover legal fees?

Yes, one major advantage of general liability insurance coverage is the inclusion of legal defense fees and court costs needed to address covered liability claims. Even if a lawsuit is frivolous, you have expert legal representation.