Business Liability Insurance in USA : A lawsuit for a minor problem such as an accident injury can financially ruin a business. Your small business is covered by general liability insurance for accidental injuries, property damage, and other claims. We evaluated 20 major insurers to find the best general business liability insurance.
Business Liability Insurance in USA : The perceived level of risk is what determines the cost of insurance. For example, a building contractor dealing with dangerous machinery and heavy equipment, such as forklifts and cranes, will have to pay more than an accountant sitting behind a desk.
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Business Liability Insurance in USA: Business owners who are in a lower-risk category might want to consider a BOP (Business Owner Policy), which offers both general liability insurance and property coverage at a cost-effective price. Exclusion clauses should be included in any new or additional business liability insurance policies to prevent duplication and reduce costs.
Best General Liability Insurance for Small Business 2024
- Allstate
- CNA
- Farmers
- Frankenmuth
- The Hanover
- Westfield
- Markel
- Nationwide
- Chubb
- Travelers
How does general liability insurance work?
Business Liability Insurance in USA : General liability insurance is insurance for small businesses, which covers your business against accidental injuries or property damage to others. Other problems are also covered, such as advertising injury and copyright infringement.
Business Liability Insurance in USA : This type of claim may be a result of your products, services, or operations. You could be forced to pay out of the income from your business and in worst-case scenarios, go bankrupt, if you don’t have general liability insurance.
Business Liability Insurance in USA : Commercial general liability insurance or business liability insurance are other names for the same insurance.
Business Liability Insurance in USA : Your general liability policy kicks in if someone files a claim for an issue, like the ones above. Your policy will cover claims up to the limit of your policy. There are two types of limits to consider when buying a policy:
- Per occurrence limit. The maximum amount that your insurer will pay for a claim. For example, a $1 million per occurrence limit.
- Business Liability Insurance in USA: The aggregate limit is the amount that your insurer will pay out for all claims made during the policy period. If your aggregate limit, for example, is $2 million, then your insurer won’t pay more than that amount in your policy period no matter how many claim were made against you.
What does general liability insurance cover?
Business Liability Insurance in USA : A business can be covered by general liability insurance against a wide range of claims including bodily injury and property damage. It also covers copyright infringements, advertising injuries, and reputational damages.
- Body injury. Your general liability insurance will cover the medical costs of someone injured by your business and your legal fees if you are sued. A customer who trips over something in your shop is an example of a bodily injuries claim.
- Property Damage. Your general liability insurance will pay to replace or repair the property if your business has accidentally damaged someone else’s property. It also pays for legal fees if you have been sued. A worker damaging furniture belonging to a customer is an example of a claim for property damage.
- Advertising injury Covers your legal costs if you are sued for defamation of another person, business or company.
- Infringement of copyright. Covers your legal fees if you are accused of using someone else’s works for marketing purposes without their consent.
- Reputational damage. Covers your legal fees for claims such as libel and slander, privacy violation, wrongful eviction, and malicious prosecution.
What Does General Liability Insurance Not Cover?
Business Liability Insurance in USA : General liability insurance can cover a large part of a business’s needs. However, it will not cover auto accidents that are related to the business, employee illnesses and injuries, damage done to your property, errors in professional services, claims exceeding your policy limits, or illegal acts committed by you or employees.
You’ll need to have different types of insurance for your business, such as:
- Injuries and illnesses of employees Workers compensation insurance is required to cover employee injuries.
- Auto Accidents. If you own a vehicle, you are financially protected in the event of an auto accident while conducting business. Hired or non-owned car insurance will cover a car that is rented for business or used as a personal vehicle.
- Professional mistakes. A errors omissions insurance policy covers you if mistakes are made in the course and scope of your work. E&O policies are sometimes referred to as professional liability insurance.
- Your business equipment and property are not covered by general liability insurance. To cover these problems, you need commercial insurance.
Business Liability Insurance in USA : Insurance will not cover intentional acts such as throwing a computer out of a window. General liability insurance will not cover deliberate or illegal acts by you or employees.
What Businesses Need General Liability Insurance?
Business Liability Insurance in USA : In a few situations, general liability insurance is a must for small businesses.
- You are required by your clients to carry business liability insurance.
- You can now open your small business to the public.
- You may work with clients or vendors.
- Use social media for work or personal use.
- Use third-party locations to conduct business.
- You may have seasonal or temporary employees.
- Independent contractors are the people you work with.
- Your business will benefit from advertising and marketing.
Business Liability Insurance in USA : A general liability policy is a must-have for any business. For instance, a insurance policy that does not include general liability would not cover any property damage you may have accidentally caused at a client site. Some examples of businesses that require general liability coverage include:
- Accountants and tax preparers
- Consultants
- Contractors
- Freelancers
- Electricians
- Handymen
- Home inspectors
- Janitorial services
- Landscaping companies
- Lawyers
- Marketing agencies
- Real estate agents
- Small business owners
- Technology professionals
How Much Does General Liability Insurance Cost?
Business Liability Insurance in USA : According to Insureon, the average cost of general liability insurance is $42 per monthly . This is $504 per annum, but the costs for your small business may be lower. Insureon customers who own small businesses pay an average of less than $30 per monthly. Less than half of Insureon small business customers (41%) pay $30 to $60 per monthly, while 30% pay more.
The cost of your general liability insurance will be determined by factors like:
- Type of business. High risk businesses (such a construction) pay more than low risk businesses (such a graphic designer).
- Years in the field. Your premium can be affected by how many years you have worked as a professional.
- Location. Your premium may be lower if your business is located in an area with low crime or low traffic than in one with high crime and high traffic.
- Your business’s insurance claim history. You can expect to pay a higher premium for general liability coverage if you have had a lot of claims in the past.
- The amount of coverage. Higher coverage limits can impact your costs.
Example of General Liability Costs for Industry
| Industry | Average monthly general liability insurance cost |
|---|---|
| Photo and video | $28 |
| You can also consult | $29 |
| Accounting and finance | $29 |
| Media and Advertising | $29 |
| Professional Services | $29 |
| IT/technology | $30 |
| Personal care | $32 |
| Real estate | $32 |
| Building design | $35 |
How to Get the Best General Liability Insurance
Business Liability Insurance in USA : Your small business insurance plan is built on general liability insurance. Follow these steps to find a quality policy.
Gather Your Information
Business Liability Insurance in USA : Basic information and documentation is required, including
- Contact information
- What does your business do?
- How long you have been in business.
- The number of employees.
- Payroll documentation.
- Estimated revenue for the next year.
- How long you’ve owned your business.
- You can rent or own the building in which your business is situated.
Consider a business owners policy
Business Liability Insurance in USA : General liability insurance is the foundational policy for a small business. However, it does not cover issues like vandalism or theft, nor will it cover severe weather, fires, or lost income. You’ll need to purchase additional insurance to cover these issues.
Business Liability Insurance in USA : This can be done by purchasing a Business Owners Policy (BOP). It bundles commercial property and general liability insurance. It is usually cheaper to purchase a BOP rather than buying all three policies separately.
BOPs include general liability and other important types of insurance for small businesses.
Compare General Liability Insurance Quotes
Business Liability Insurance in USA : The policies of small business insurance companies are not priced the same. Comparing quotes for business insurance from different companies is the best way to get a great price on general liability or BOP. Online or through an independent agent, you can obtain free quotes for business insurance.
General Liability Insurance: Is it required by law?
Business Liability Insurance in USA : It’s not required by law to have business liability insurance, but failing to do so leaves your company vulnerable to many costs that can bankrupt it.
The Risks of Not Having General Liability Insurance
Business Liability Insurance in USA : Without general liability insurance, facing judgments, settlements in court and attorney fees can be extremely expensive. It could even lead to a company going bankrupt. Legal counsel may cost over $100 per hour. According to The Hartford, court costs can exceed $75,000, even if you drop the lawsuit.
Your business is at risk if you don’t have general liability insurance. You may also lose customers if they refuse to do business with your company if you lack general liability insurance.
Business Liability Insurance in USA : A certificate of insurance is required to prove your insurance coverage. This document is an official listing of all coverage types and policy limits.
General Liability Insurance Policy Limits
Business Liability Insurance in USA : When purchasing general liability insurance it is important to understand two different types of limits.
- Per-occurrence Limit: The maximum amount your insurance company is willing to pay for a claim. Your insurance company will pay up to the per-occurrence limit of $1 million per incident.
- A total limit: The maximum amount that your insurance company is willing to pay for all claims filed during the policy period. Your insurance company won’t pay more than $2 million regardless of how many claims you receive. The aggregate limit will apply to most general liability policies that have a one-year term.
General Liability Insurance Claim Examples
- Injury claim. Customer bumps into shelf and heavy object falls on their foot. They break their big toe. Your general liability policy can cover medical expenses, legal fees and any settlements or judgments that result from the incident.
- Claims of copyright infringement. Someone claims that you have used their artwork in your marketing materials. Your general liability insurance may cover your legal defense costs, as well as judgments and settlements.
- Property Damage Claim. You workers damage the hardwood floors and walls of your client when they move a large appliance in their home. The damages can be covered by your general liability policy.
- Claim for reputational damage. You make a comment about another company in the press while promoting a large sales event. This leads to a lawsuit. General liability insurance can pay for legal defense costs, settlements and judgments.
Terms to Know When Shopping for Business Liability Insurance
- Coverage for business liability: A term used to describe general liability insurance that covers accidents, property damage, copyright violations, advertising injuries, and reputational damage.
- Business owner policy: Type of policy that bundles together multiple coverages including general liability insurance, business interruption insurance, and business property insurance. Other coverages, including workers compensation, professional liabilities, commercial auto, and data breach insurance, can be added.
- Commercial umbrella coverage: A policy that kicks into action when a claim is greater than the amount covered by an underlying insurance policy. If, for example, the claim amount exceeds your liability limits, then your commercial umbrella policy can cover that difference.
- Employment Practices Liability Insurance: Covers settlements for claims your business terminated employees in a wrongful manner or violated the rights of those employees. Employment Practices Liability Insurance covers legal fees for such claims.
- Exclusions A restriction in your policy limits or excludes coverage of specific events, places, people, or property. A general liability policy, for example, excludes coverage of employees injured at work (that is covered by workers compensation).
- Code for general liability classification: Based on the industry, this code helps insurers determine the risk level of your business.
- Medical Payment Insurance: This insurance covers medical costs when your company is at fault for an injury to another person (not your employees).
- Liability for personal injury and advertising: Covers claims like an employee who speaks or publishes inaccurate information which slanders or libels an organization or individual. This also includes claims that published materials infringe on copyrights, result in an wrongful eviction, or violate a person’s privacy.
- Property Damage Insurance: This insurance covers accidental damage caused to another’s property. If your employee damages someone else’s house while on a construction site, for example.
- Subrogation The insurance company may try to recover money from the insurer of the person who caused the injury or damage.
Methodology
Business Liability Insurance in USA : Based on complaints for commercial liability insurance, we rated the top business insurance companies. The complaint data was compiled by the National Association of Insurance Commissioners and is based upon complaints that have been upheld by insurance departments in all 50 states.
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FAQs – Business Liability Insurance in USA
What is general liability insurance?
Business Liability Insurance in USA : Your general liability insurance will kick in if someone files a claim for your small business due to a covered problem. Insurance pays for medical expenses of others and your own (up to the limits of your policy).
If a customer falls over a cord and breaks an arm in your shop, the general liability section of your Small Business Insurance will cover their medical expenses and your legal costs if you are sued.
Does an LLC need to be insured for business liability?
There are many reasons that an Limited Liability Company needs small business insurance . A limited liability company can be a good way to separate personal assets from business assets, but a costly lawsuit could force you out of business.
Your LLC is covered by business liability insurance for claims involving property damage, injury to others, reputational damage, copyright violation, and advertising injury. Your LLC would be forced to pay for a costly legal defense and judgments, as well as settlements, if you did not have business liability insurance.
Does general liability cover thefts?
Theft is not covered by general liability insurance. You’ll need to purchase a Commercial Property Insurance if you want to cover stolen equipment like computers, tools, and equipment. Property insurance policies cover damage caused by fires, severe weather conditions and vandalism.