By offering specific forms of coverages separately, insurance companies allow business owners to buy only the protection they need and avoid the expense of unnecessary insurance products. Depending on your situation, you may need to purchase several types of coverage to fully protect yourself and your company’s assets. In some cases, general liability insurance may not be necessary at all; you may do better with a different type of policy. Understanding your options will help you make the right choice for your business insurance needs.

Who Needs General Liability Insurance?

Liability insurance protects your business from litigation in the event that someone decides to sue you. Businesses require protection of this kind because they can be an attractive target for lawsuits. Depending on the type of business you have, you may be at higher risk of litigation as a result of what your company handles.

Many common scenarios could result in litigation:

– A customer falling on a slippery floor in your shop, injuring a hip
– Accidentally causing damage to a customer’s property while you are performing your services
– An employee bad-mouthing a client in a way that could be viewed as slander

For these and many other circumstances, liability insurance can provide financial compensation to the injured party while keeping you out of court.

If you are not sure whether your business needs general liability insurance, ask yourself a few questions:

– Do customers or clients come to your premises?
– Do you have contractors or employees working at your location?
– Do employees go out to work on-site on your behalf?
– Do you have access to property belonging to your clients or customers?

If the answer to any of the above questions is “yes,” then you should consider protecting your business with general liability insurance. However, don’t assume that this coverage will take care of all your protection needs.

General Liability Insurance Limits

It is important to remember that liability insurance does not protect your own property, and it does not generally cover claims from your employees. It exists solely to protect your company from lawsuits.

For example, consider a scenario where an employee is performing cleaning services at a customer’s residence and accidentally drops an expensive vase, moves furniture and causes scratches to the hardwood floor, or causes a slip and fall by not drying the floor thoroughly.
The damage to the vase/floor/injuries will be covered by your liability insurance. Because situations like these could happen to any business, it is a good idea to think about the potential risks you face during the workday and buy coverage accordingly.