General liability insurance, also known as commercial general liability insurance (CGL) and LLC general liability insurance, is a basic insurance policy that protects your small business’s assets from a variety of dangers. Most LLCs and small businesses purchase general liability insurance as soon as they are formed, in order to ensure that they are protected in the event of an accident or disaster.
General Liability Insurance Defined
The Really Useful Information Company (TRUiC) defines general liability insurance as a type of commercial liability insurance that protects a company from the financial consequences of physical injury, personal injury, or property damage claims.
It is suggested that you obtain general liability insurance while starting a business. General liability insurance covers harm caused by you or your staff and can protect your LLC if someone is injured on your business’s premises. If you are held accountable, the policy will pay your legal defense as well as the costs associated with the loss, subject to the policy’s stipulated limitations.
What Does General Liability Insurance Cover?
An accident can happen very soon, it is important to understand what incidents one needs protection from:
- Any physical harm to a person’s body, including non-employees
- Damage to real or personal property, whether it is yours or a client’s
- Medical expenses incurred as a result of incidents that occur on your property
- Slander, copyright infringement, invasion of privacy and property, unlawful eviction, and false arrest are all examples of personal liabilities
- Damages incurred as a result of your advertising or by infringing on another company’s copyright
- Any legal decisions that need to be made, or the hiring of legal representation
TRUiC Identifies The Following Instances That Are Not Covered by General Liability Insurance:
- Warranties provided by your company
- The compensation of employees who are injured on the job
- The compensation of employees whose contracts are let go
- Any commercial auto insurance claims
- Fire or storm damage to commercial premises
Why General Liability Insurance is a Necessity
General Liability Insurance is a must-have for any company that owns real estate or other significant assets. Premiums typically range from $300 to $1,000 per year, depending on your coverage needs and line of employment. Liability insurance helps shield your company from the financial ramifications of lawsuits, which can often cost tens of thousands of dollars. A general liability insurance coverage is a small sum to pay for the security and peace of mind it provides, especially considering the inexpensive premiums.
The Advantages of General Liability Insurance
TRUiC explained that a business general liability policy will protect your LLC’s assets in the event of a claim. There are, however, other real advantages to having liability insurance for your LLC. A general liability insurance policy shows that your company is stable and well-established. Having insurance demonstrates that you are concerned about your employees’ well-being. Employees can rest a little better knowing that their work is insured and safeguarded. Potential clients frequently want an insurance policy because they do not want to be held liable for any mistakes that may occur. Having an insurance policy could mean the difference between winning and losing a bid.
What Is the Cost of General Liability Insurance?
An LLC’s liability insurance policy typically costs between $300 and $1,000 per year; however, different factors come into play when estimating this price. These factors include the organization’s business model, the needs of the organization, and the various risks that can occur. Obtaining a quoteis the only method to get an accurate figure for your specific requirements.
The above mentioned are just three factors that come into play when estimating your business premium, but there are more variables that need to be taken into consideration:
- How likely are your businesses exposed to risks?
- The location your business is situated in
- The number of employees you have and their annual payroll amount
- The amount paid out per incident
- Per-policy-period amount of coverage to be paid
According to US law, having insurance for your LLC is not required, but before you can work for some companies or clients, they may need you to have a specified amount of general liability insurance. When renting commercial space, certain property owners may require that you have liability insurance. With the help of TRUiC, you are sure to make better business decisions.