Most established businesses are familiar with general liability insurance as a primary safety net against litigation. Sometimes entrepreneurs launching startups look for ways to bypass insurance, but the companies that cut corners on insurance are typically not the ones that eventually thrive. Here are essential points about saving money and still getting sufficient coverage with general liability insurance in Portland, OR.
Does your small business require general liability insurance coverage?
The main factors that determine proper liability coverage for businesses involve risks that can turn into insurance claims and lawsuits. Someone working from home online as a sole proprietor typically doesn’t need as much insurance as a company with regular employees. Insurance is like a future bank account that pays for damages from various types of disasters. Firms that engage in dangerous work like construction contractors or establishments that allow plenty of physical contacts are most in need of customization and elaborate liability policies.
What does a commercial general liability insurance plan typically cover?
Commercial general liability insurance covers many of the bare minimum essentials most businesses need to protect their assets from getting drained by lawsuits. While each policy depends on the insurer, general liability covers someone else’s bodily injury or property damage at your place of business. A one-person entity, though, can still face lawsuits involving defamation and false advertising claims. This coverage pays for the legal costs of litigation, even for frivolous lawsuits. The coverage is up to limits determined by the policy terms.
Does the law need businesses to carry general liability insurance?
Laws involving insurance must be reviewed at the state level, although most states do not require businesses to carry any type of insurance except workers’ compensation if they hire employees. It’s still a good idea to purchase general liability coverage because you never know when a visitor might slip and get hurt at your establishment. It’s better to pay affordable monthly payments to get access to enormous payout benefits than to have no insurance and then potentially owe thousands or millions over lawsuits. Your clients or landlord might need your firm to carry general liability insurance coverage so as to ensure that your business can tackle personal injury or property damage lawsuits.
How can commercial general liability insurance safeguard my business?
Commercial liability insurance protects your business from collapse if it gets hit with a massive lawsuit. Most small businesses cannot afford million-dollar lawsuits but can afford to pay monthly premiums to stay out of money-burning legal problems. Coverage limits determine how much the policy pays out for claims. Typical plans offer a $1 million per occurrence limit or a $2 million aggregate limit over the policy’s lifetime.
How can I purchase a general liability insurance policy?
Once you find a knowledgeable insurance expert, you can ask a series of questions that pertain to your specific business instead of making the mistake of assuming the cheapest policy will cover everything. The insurer should be experienced in your industry and licensed in your state. Many insurers allow you to apply online.
How much does general liability insurance coverage typically cost?
General liability insurance is typically affordable for small businesses in most states. Organizations with high liability insurance premiums include construction, cleaning, and landscaping. Small businesses usually pay $300-600 per year on liability coverage. About 17 percent of small firms pay less than $300 per year. Costs are determined by the type of business, how long the company has been in business, and location.
How do I get proof of my general liability insurance coverage?
Some entrepreneurs or organizations must show proof of general liability insurance in order to subcontract with other companies. All you need to do is talk with your insurance agent and request a certificate of insurance. It’s important first to review the policy and clearly understand what it covers.
Do independent contractors need any general liability insurance coverage?
Many independent contractors need general liability insurance, especially if larger firms outsource them. It’s often a requirement among business partners to reduce financial risks. Even if the larger organization carries enough liability insurance, it will likely still require subcontractors to carry their own liability insurance. Another example when you may be asked to provide proof of liability is when you sign for a property lease or equipment.
What should I do if my business needs more coverage?
You can always update your coverage based on changes to your business when you need to increase coverage limits. It’s wise for business owners to manage risks as the enterprise evolves proactively. Contacting your insurance agent periodically to review your coverage and discuss business model changes is the best approach to meet your coverage needs.
How do general liability and professional liability insurance differ from each other?
General liability insurance differs from professional liability insurance based on different types of risks. While general liability plans cover physical damage, a professional plan covers more abstract damage such as errors and omissions related to a service, e.g., a client claiming financial loss caused by a professional mistake you made. Professional insurance coverage is often bundled with a standard business owner’s policy (BOP).
Some money-saving tips on general liability coverage
The best way to lower business insurance payments is to reduce risks by creating a safer work environment rather than just cutting coverage. Here are other tips to help you save on general liability coverage:
- Use checklists to review workplace risks and have proper safety protocols in place
- Bundle your insurance policies if your provider offers a discount for buying multiple types of policies together
- Try to pay the full premium upfront if your provider gives a discount on advance payments
- Launch a safety training program for employees
- Purchase security cameras
- Establish a policy on how to use social media to avoid defamation lawsuits
Conclusion
Understanding general liability coverage helps businesses cut costs and get the right plan. Contact us here at Action Insurance Group to learn more about securing appropriate general liability insurance in Portland, OR. We can help customize your commercial liability insurance to fit your specific needs so you can spend more time focused on running your business.
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