Your business, which is still small for now, has started from an idea that, over time and with your enthusiasm as an entrepreneur, has turned into a dream that you now pursue every day. But small businesses are vulnerable to unforeseen events because they generally have small capital and cannot handle in the event of potential disasters or accidents that involve lawsuits and obligations to pay compensation. All this can destroy a small business, which is why it is very important for owners to consider a general liability insurance for small business policy.
First, you must apply for general liability insurance. Your insurer will perform a check on your company, its activity, history of accidents and insurance claims etc. If no extraordinary risk is found, the insurance company will cover you.
The best thing is to get general liability insurance soon after you fund your business, because you will likely need it in different situations, such as signing contracts with big companies, applying for professional license, signing an office lease etc.
A general liability insurance for small business policy provides you peace of mind, because it covers many common lawsuits and keeps your finances relatively secure. In other words, if you are sued, you will not have to file bankruptcy. Business partners and clients alike want to be sure that you are able to deliver the work and finish the job, without being put down by a lawsuit; general liability insurance is a guarantee in this regard.
What coverage does a small business need?
First, you must choose a reliable insurer and see what options it offers. The policy must be customized to match your business` needs. For example, running a restaurant is not the same with manufacturing office furniture; in the first case you will need slip-and-fall coverage, while in the other you will definitely need product liability coverage – all these besides the types of insurance required by the law (workers` comp if you have employees and commercial auto insurance, if you drive for business purposes).
You should consider purchasing at least General Liability and Business Property insurance; alternatively, you can get a Small Business Owner’s Policy, which contains both, plus Business Income Insurance.
A good insurance company will guide you through your options and help you find the right fit.
What is covered? A general liability insurance for small business policy covers bodily injuries, medical payments, damage to other properties as well as reputational and advertising injuries.
What is not covered? Although this type of insurance offers broad liability coverage which is very important for your small business, there are also risks that will not be covered and or which you might need to purchase other insurance products:
- Damage to your own property
- Auto claims (they require commercial auto insurance).
- Professional negligence (you will need professional liability insurance for this)
- Lost income caused by business downtime (you can be covered with business interruption insurance).
- Employees who get hurt while doing their job (a workers’ compensation insurance covers this type of accidents).
- Product defects (you will need product liability insurance to cover these)