Small business insurance is critical.
Even if you do not have employees, you have liabilities as a business owner; therefore, you need adequate coverage.
The most basic form of commercial insurance, and one that every business should have is general liability insurance.
The coverage for general liability is typically the same for most insurers, but it is important that you review your existing policy and make sure you have adequate coverage and getting the most out of your coverage.
Items Covered by Your General Liability Commercial Insurance
Lawsuits and Settlements
Your general liability insurance covers you in the event your business is sued and a judgment is awarded. It also covers medical expenses in case of a bodily injury lawsuit.
If there is a claim against your small business for bodily injury or property damage, you should have coverage through general liability to cover these losses.
Your general liability insurance should protect you in the event your advertising violates a copyright for someone’s advertising or branding.
Electronic Data Liability
Your general liability should have some coverage for electronic data. This includes breaches or data that is lost during a hacking or natural disaster, computer malfunction and more.
Items Not Covered by General Liability Commercial Insurance
Employee injuries do not fall under general liability; instead, you would need workers’ compensation coverage to help employees if they are injured while performing job duties.
If you offer a professional service to customers, you may not have adequate coverage with just general liability. Professional mistakes are not covered under general liability policies; therefore, you need professional liability coverage. This is especially true if you are at risk for a lawsuit for your solutions, services or opinions shared with customers.
While lawsuit costs are covered through general liability insurance, punitive damages are not. Punitive damages are those designed to punish a defendant in a civil liability case. So, they would require gross negligence or malicious acts. Rarely would general liability cover these types of damages.
Warranty of Work
General liability does not include your company’s warranty on your work. It is known as the workmanship exclusion, and most general liability insurance policies will have clauses that explicitly state the warranty is not covered by the plan itself.
You need a business auto insurance policy if you have company vehicles or have employees that drive company-owned vehicles. Your general liability insurance will not cover any auto-related accidents or damage.
Speak with an Insurance Agent About Adequate Commercial Insurance
Every business is unique, and every business has a different set of commercial insurance requirements. Depending on your net worth, company operations and the number of employees, you may need more coverage or less coverage. So, it is best to speak with an insurance broker that can perform a risk assessment and help you find the right mixture of policies to protect your assets.