Your general liability policy provides financial protection if you are held responsible for some of the most common accidents that can occur at a business, such as a customer injury or damages to someone’s property. It also provides coverage if you are forced to defend an accusation of libel or slander.
General liability insurance, also known as commercial general liability (CGL), covers the risks that affect almost every business, no matter what your industry. It is the most common insurance for small businesses and self-employed professionals, and it’s typically the first policy purchased by new businesses.
General liability is included in most business insurance packages because it covers the risks that many business owners face every day. It is not typically required by law, but some clients and agencies could ask you to have a certificate of insurance before they work with you.
Here are some examples of businesses owners who might need general liability coverage:
- General contractors sometimes need general liability as part of the license requirements in their state.
- Fitness instructors need coverage for some certifications, and it’s usually required if they work at a gym.
- Anyone who wants to rent commercial property could be required to have coverage as part of their commercial lease.
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What does General Liability cover?
General liability insurance protects you from unexpected expenses related to many of the most common types of accidents that can affect your business and lead to lawsuits:
- Injuries to people who are not your employees
- Damage to property you don’t own
- Accusations of libel or slander
Why is General Liability important?
You’ll get help paying for expenses after an accident if you’re held responsible for injuring someone or damaging their property. Commercial general liability can also help cover defense costs if you are accused of libel or slander.
Here are more details on what makes general liability insurance so important:
It helps you get more jobs
Business liability insurance shows that your business is reliable and trustworthy. It gives clients peace of mind knowing that you will take responsibility for your mistakes. It could give you a competitive advantage if your potential client has a choice between your business and another business that doesn’t have insurance. Many larger clients also require coverage before they’ll sign a contract with you.
It lets you run a legal business
Some states and cities will only give you a business permit if you have active general liability insurance and a certificate of insurance. If your business is certified or accredited by a professional organization, you might also be required to keep your general liability insurance active.
Your commercial lease might require general liability insurance
If you plan to lease commercial space, your landlord could also insist on seeing your general liability insurance certificate. Coverage is often required because it shows you will have the financial protection needed to cover expenses related to property damage or injuries related to your business at the leased space.
It lets you focus on growing your business
When you have general liability insurance, it gives you peace of mind. You won’t have to worry about what you would do if a client trips and falls or how you would pay for a new vase if you accidentally broke one in a client’s house. Having business liability insurance means that instead of feeling nervous about what could happen, you can concentrate on growing your business.