How General Liability Insurance Works

From the perspective of commercial coverage, general liability insurance is a great way to protect your business from unexpected claims brought during the regular conduct of your business activities. As much as you want to foresee any potential issues that may arise as you go about your business obligations, there are times when issues slip under the cracks resulting in untoward incidents that can put your business in harm’s way. Considering the litigious nature of today’s society, these momentary slips can very well lead to business closure if the court rules that you pay all damages and claims pertaining to a specific complaint.

General liability insurance ensures that you are not left on your own in dealing with these claims. Like all types of insurance policies, general liability insurance provides commercial coverage to address complaints and claims arising from your company’s liability in the normal conduct of everyday business. To illustrate, consider this simple example.

Suppose you are running a small construction business in a local area and you signed up to a general liability insurance policy with commercial coverage of up to $150,000. Now, if there is a claim stemming from a workplace incident where one worker was injured requiring serious medical treatment, your general liability insurance foots the bill for these claims in the event that the court rules in favor of the complainant. If the damage amounts to $200,000 for example and your coverage is only $150,000, your insurance company pays for the first $150,000 and your company shoulders the remaining amount. With this policy in place, you are ensuring that you don’t shoulder all claims which can put you out of business quickly.

These types of insurance provide protection where needed so you can focus on doing your work every day without having to worry that any mishap can shut you down. In short, all businesses that are serious with risk mitigation and liability protection should consider getting general liability insurance so they are insulated from the brunt of claims and complaints that arise without notice.

What’s left, in the end, is selecting the best policy that suits your company. For this, you need to properly assess your business risk so you can select the right commercial coverage that suits your needs. If you belong to a risky business like a construction company, you most definitely need general liability coverage. If your business is low-risk such as a postcard printing company, you can bundle liability and property insurance into one so your take care of your company assets without spending too much on insurance.

Think about these considerations carefully because you can never be too prepared with any eventuality. With general liability insurance, you at least have a claim to fall back on.

Comments: 15

  1. Taryn April 11, 2013 at 7:16 pm

    I’m fitness instructor a vendor in the California Avenue Maqui berry farmers market. I don’t personally possess a retailers permit or general insurance, but the organization Sometimes for does. Shall We Be Held permitted to market items in the Maqui berry farmers Marketplace for the organization (using their permission obviously), or would Personally, i need to get the permit and insurance? Also, just how much will it cost to become a vendor? I understand there is a $50 annual fee, but can there be a sum you spend every time you sell there?

  2. Bobby April 16, 2013 at 10:30 pm

    Just how much does general insurance cost for any renovator that’s the only owner and worker of their own business? What is great deal to obtain? (coverage)

  3. Brant June 22, 2013 at 12:46 pm

    Greetings To any or all,

    I’m presently in a stage within my business that I seek Public Insurance and Workcover, in my painting business.

    I presently possess a Small Service business, offering Painting Services.

    I’d now need business insurance, therefore I’ve come here to request help with getting a fantastic business insurance that may offer ‘Public Liability’ and ‘Workcover’.

    Thanks greatly for help, the assistance is extremely appreciated.

    Possess a great day and Thanks

    Best Wishes,


  4. Kit July 19, 2013 at 6:24 pm

    I am employing a workplace in my small company from my manager inside my old job with a spare office within the building he works in. We’re an application development company and will not do much apart from using our computer systems at work itself. My old manager states that I’ll need insurance for his company (who own the lease) to approve it, apart from that things are fine. I stated I’d return to him about this and upon a fast google discovered that you will find various liability insurance policies. Which sort is he probably to wish us to obtain as well as how can i obtain a good deal, we earn hardly any presently so can not afford much expenditure.

  5. Felipe September 3, 2013 at 11:08 am

    I’ve an independant insurance company in Arkansas and would really like additional causes of earnings. What business could be lucrative and co-exist easily together?

  6. Marnie September 10, 2013 at 4:47 am

    I in addition have a home studio and my company is classed like a sole proprietorship. I additionally undertake projects along with other advertising or design agencies and focus on-site. Is insurance something I ought to get and why?

  7. Joette September 25, 2013 at 8:29 am

    I wish to safeguard myself from liability to have an accident or injuries that could occur. The renovator doesn’t have insurance and can’t have it because he doesn’t possess a ssn yet. Can there be something that holds up in the court to safeguard me just in case I’m prosecuted? Any suggestions? (Yes, I understand I wouldn’t have this issue having a licensed insured renovator but please attempt to answer this unique question. Thanks)

  8. Fidel September 27, 2013 at 11:28 am

    Can anybody produce a round about concept of the yearly cost for any bond/general liability insurance policy for a little cleaning business with simply 1 worker in NY? Does $1-2 1000 seem about right?

  9. Jeremiah September 27, 2013 at 5:23 pm

    This handles companies and sub-companies. Should i be having to pay for any general liability claim why will not insurance policy damages within an accident?

  10. Hershel October 16, 2013 at 7:09 am

    does anybody understand how much you spend monthly or yearly to obtain the general insurance??????

  11. Sheron November 7, 2013 at 12:40 pm

    Does any know where I’m able to obtain a an over-all liability insurance plan for any Temporary Airbrush Tattoo Business, in Nj? I attempted Allstate and Statefarm…elsewhere?

    Thanks for your solutions, I simply found a business therefore if other people is searching it’s K&K insurance provider. THANKS Everybody!

  12. Josef November 22, 2013 at 1:51 pm

    About four years ago, I installed framework and roofing on the very costly house. The rooftop leaked and triggered harm to the inside. The client known as my insurance (contractor insurance) and my insurance provider compensated them $20k to have it fixed. Now, 4 years later, they’re suing me for that $20k they needed to shell out. Is that this typical? So what can I actually do about this?

    I’m in Ohio.

    I suppose that may be, the home owners insurance compensated it. I’ll call my former agent and request him. Are you currently telling submit this claim that they can my insurance provider I’d at that time?

    Following the leak, Used to do return and switch the roof. It leaked again next. The homeowner had been with them and filed claims; I hadn’t heard anything about this since; I reckon that they most likely had the rooftop fixed or changed again.

    Ok, I just read the suit again and located that it’s the general contractor’s insurance provider that’s suing me, not my insurance or even the homeowner. I had been the framework and roofing sub-contractor around the project. I, consequently, sub-contracted to roofing try to a roofing company, who didn’t install the flat area of the roof work properly. I possibly could not reunite with him to repair it, and so i compensated another roofing company to place a brand new flat roof in, which leaked too, although, not a leak the 2nd time.

    I believe I’ll re-request this with better info

    I lately cleared all of the old job folders within my office and i believe all of the documents out of this job is finished

  13. Ismael November 27, 2013 at 8:05 am

    Sometimes in a variety of chemical plants and refineries repairing/maintaning/calibrating the laborotory instruments during these places. I am presently being employed as a sub-contractor through another company but that’s going to change, as my company partner and that i are moving away from their store to begin our very own business.

    Many of these plants require between 3-5 million in liability to my knowlege. I want a ballpark figure of the items that type of coverage costs within the Louisiana/Gulf coast region. This past year we did $150,000 in sales between 3 people and also the revenue continues to be growing substantially every year (~20% approximately). Thanks ahead of time for the answer.

  14. Kanesha December 12, 2013 at 1:36 am

    I am beginning a cosmetic’s company and also the manufacturing company I am wishing to utilize requires business insurance. I’ve no previous payout or earnings in the my start-up company by yet. What can be the easiest method to start getting this insurance, since a lot of companies require the organization to become already off the floor with revenue and mine is incorporated in the developing stages?

    Thanks ahead of time

  15. Edwin December 17, 2013 at 8:54 pm

    We are planning on beginning a mobile dog clean business within the United kingdom and wondered if we have to get yourself a licence in the local council or perhaps in general before we begin working? I’ve continue reading google that we’ll require a public insurance but they didn’t mention other things. Does someone understand what type of documents we have to obvious in advance? Any help could be appreciated. Thanks.

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