Small Business

General Liability Insurance

Updated on January 07, 2020


Updated January 7, 2020

As you may know, there are several risks involved when owning and operating a business. As a small business owner, you need to make sure that you are well protected. Carrying various types of insurance is essential to guarding against the risk of financial ruin in the event of a lawsuit. The following describes what general liability insurance is, what it covers, and some reasons why a business owner would need it.

What is General Liability Insurance?

General liability insurance protects a small business owner from claims related to property damage, bodily injury, and business related negligence. General liability insurance also protect employees and various aspects of the business up to the limits of the individual policy. If an individual or another business files a claim against you, your general liability insurance coverage may help cover attorney fees, investigation by the insurance company, out of court settlements, and any court related judgments.

In short, here’s a summary of what general liability insurance normally covers and what it doesn’t.

  • The types of things liability insurance will cover include bodily injury, property damage, advertising injury, libel, slander, lawsuits, and settlements.
  • Claims that are usually not covered include professional mistakes, employee injuries, and auto coverage.

Why Would a Small Business Owner Want General Liability Insurance?

General liability insurance is recommended for virtually every small business. Even if your business is considered low risk, you could potentially face bankruptcy if even a single claim was brought against your company. Liability insurance may help keep your business operational in the event of a costly lawsuit. In some cases, clients may even require small business owners to show proof of general liability insurance before they will do business or sign a contract.

What is the Difference between Professional and General Liability Insurance?

Generally speaking, professional liability insurance covers claims due to professional errors and omissions. This type of insurance can also cover the errors and omissions of employees that a small business owner may hire. General liability not only covers obvious claims such as bodily injury, medical payments and property damage but harm to reputation. Harm to reputation could include libel or slander, for example. General liability insurance can help protect a small business if they are sued for anything from slander to bodily injury.

What Types of Liability Insurance is needed for a Small Business?

According to the U.S. Small Business Administration, the type of liability insurance needed by a small business would depend on the kind of small business the owner has. For example, someone operating a building contractor business may need more coverage than a web consultant. The location of the small business, and particularly what state it’s operating in, is another factor that will need to be considered. If it’s determined the business falls into a category that is lower risk, one may want to consider purchasing a policy that combines property insurance and general liability insurance.

Choosing a Licensed Insurance Broker

Small businesses need different types of insurance coverage in order to protect their assets and cover their employees. Small businesses that are looking for health, dental, or vision plans for their employees may need the assistance of a licensed insurance broker that has proven experience in the insurance field. When selecting eHealth insurance, a small business owner will have access to an easy to navigate website as well as a variety of premiums and a variety of plans. Contact eHealth insurance for more information regarding your small business insurance needs.

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