THURSDAY, MAY 20, 2021
As a small business owner, you have a duty to protect your company from unnecessary risks. You do your best to prevent issues from happening, but accidents still happen. Having appropriate insurance coverage can help you avoid financial hardships if a lawsuit ever occurs. Below are a few frequently asked questions about the value of having general liability insurance.
Do I Need General Liability Insurance to Stay Legal?
The simplest answer to this question is that general liability insurance is not a legal requirement. However, certain industries do require this type of policy to apply for professional licensing. There are also situations where you might work with larger clients that want to see proof of coverage before doing business with you. In these cases, it is important to have coverage in place beforehand.
How Much Coverage Do I Need?
The amount of required coverage generally depends on the industry you are in and what your business does. For example, contractors may need more insurance coverage than computer repair professionals. Restaurants may need different coverage than retail store owners. However, the most standard level to start with is $1 million per instance with a $2 million aggregate limit over the life of the policy. Speak with your insurance agent to discuss your unique policy and coverage level needs.
Which Industries Need General Liability Insurance Coverage?
Just about every small business could stand to have general liability insurance coverage, but some industries need it more due to higher risk levels. These include construction companies, auto repair shops, retail stores, restaurants and hair salons (i.e., businesses where clients routinely come into a physical location or where there is an element of danger involved in everyday operations). Even professionals such as IT consultants, graphic designers, freelance workers and real estate agents should consider coverage. To find out if your business could use general liability coverage, speak with a local agent.
What’s the Difference Between a Business Owner’s Policy (BOP) and a General Liability Policy?
The difference between the two options is slight. Business owner’s policies (BOPs) include a provision for general liability coverage, but BOPs also feature extra coverage for property damage. Additionally, BOP plans often cost a bit less. Depending on your needs, this can be a better and more cost-effective alternative to a general liability policy.
Regardless of your business type, general liability insurance can be a sound investment and provide invaluable peace of mind. Speak with your insurance agent today to learn more about ways to protect your business.
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