Running a business can be risky. As soon as you start selling your goods or serving your clients, lawsuits arising from negligence may occur and your company may be liable for the damage. If no insurance policy protects your business, you can imagine how enormous the amount of money that you have to spend to compensate for the damage and how serious the damage that your company’s reputation will sustain. To avoid such disastrous situation, you have to make sure that your company is properly insured. General liability insurance coverage is meant to provide your business with comprehensive protection in the event your customers, clients or other third parties sue your company for damages, injuries or losses they suffer.
Why General Liability Insurance Is Considered Important
There are three reasons why general liability insurance is considered important.
It provides protection for bodily injury. If your customers or clients are injured in your company’s property and they sue you, this insurance will cover all necessary expenses to compensate for the injury.
It provides protection for property damage. If your customers’ property is damaged because of your negligence or that of your employees, this insurance will also cover the damage compensation.
It provides protection for personal injury. If any actions or projects endorsed, organized or conducted by your company defame a certain individual or damage his/her reputation, your company may be sued for libel. In this situation, general liability insurance can also provide reliable protection.
It covers all necessary expenses for the litigation. Attorney’s fee, police reports and other costs associated to the court are covered by this insurance.
Considering that any injury-related disputes that are not settled quickly will cost a lot of money and damage your company’s reputation, general liability insurance that protects your business from liabilities is considered important.
What Is Not Covered by General Liability Insurance?
General liability insurance protects the company only from third-party claims. It doesn’t offer protection for injuries or damage sustained by the company owner or employees. Therefore, if your employee is injured in your company’s property or if a customer injures him/her, you cannot compensate for the injury using this insurance. General liability insurance may also not provide coverage for injuries and damages that are caused by natural causes or the acts of God (flood, earthquake, etc.) and ones caused by terrorist attack.
Is There Any Reason You Shouldn’t Buy General Liability Insurance?
Although general liability insurance is important for your business and its premium is relatively inexpensive, it still adds additional expenses to your business. You still have to pay its premium, which can be rather difficult to handle if your business is still growing. Besides, because general liability insurance is a combination of multiple insurance policies, you may eventually have to pay for something that you never use. In general, general liability insurance is particularly important for developed companies with many valuable assets because they will likely suffer a great financial loss if their customers sue them.