Essential Tips for Saving Money on General Liability Insurance Policy

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.

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.

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.

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.

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.

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.

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.

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.

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).