Commercial General Liability Insurance 101

You’ve heard it before—your small business needs insurance coverage to protect against the unforeseen. The two most commonly purchased policies are commercial property insurance and commercial general liability insurance. The former is fairly self-explanatory, but what about the latter?

Commercial general liability insurance covers the expenses associated with third party obligations, such as if a visitor gets injured on business property or is assaulted by an employee in the course of business operations. These and other liability incidents often result in expensive lawsuits, which commercial general liability insurance is designed to cover, along with any rewarded settlements and lost income due to business interruption (depending on the details of your policy).

This type of coverage, sold individually, often costs less than $2,000 per year, which is a drop in the bucket when compared with the tens of thousands (or even millions) you may spend on a lawsuit. However, you can save even more if your business qualifies for a business owner’s policy, or BOP. A BOP combines property and liability coverage, as well as additional coverages of your choosing, to offer a bundle policy package with a single premium to pay. Many small and medium sized businesses enjoy the convenience and savings that come with this type of policy.

When determining how much liability your business needs, speak with a qualified insurance agent who can identify the perceived risk associated with your business and industry in general. For instance, a contractor will have a higher risk profile than, say, an advertising agency. The higher the risk profile of your business, the more coverage you may need. If your business’ risk is exceedingly high, you may also consider an umbrella insurance policy to add an additional layer of coverage on top of your insurance portfolio.