Why Is Commercial General Liability Insurance Necessary?

Generally, the following are advantages of an insurance policy:

  • Provision of economic protection
  • Risk Sharing
  • Maintenance of living standards
  • Elimination of dependency
  • Creation of employment
  • Promotion of foreign trade
  • Promotion of the saving culture
  • Enhances a smooth operation of business activities
  • Helps in reduction of inflation rates

General liability insurance (GL), typically known as business liability insurance, is a policy that offers protection from various claims such as bodily injury, personal injury, property damage, and other losses or damages that arise during the operations of your business.

Commercial general liability is structured to protect your business properties when an incident occurs because of a non-professional act that can cause your business to be sued by a third party. The quotes of general liability typically include:

  • Property damage and bodily liability
  • Damage to properties rented to you
  • Medical payments
  • Advertising and Personal injury
  • Products finalized operations

Who Requires General Liability Insurance?

General liability insurance coverage is regularly joined with assets insurance in a Business Owners Policy. Nevertheless, the package is also available to several contractors as a single coverage via the Progressive Advantage Business Program.

As a business owner or a contractor, you are required to have business liability coverage to protect your business activities. A single accident can lead to a lawsuit where you may face challenges while handling.

The best way to safeguard your business is to ensure you have liability coverage that suits the level of the risks that your business faces.

Some clients and employers might also need you to possess a particular amount of general liability before forming a partnership.

General Liability Insurance for Small Businesses

If you operate a small business, you must have general liability insurance, particularly if you own or have rented an office or a commercial building. In most clients’ contracts, general liability insurance coverage is a necessity.

Regardless of whether this requirement applies to you or not, commercial general liability insurance has numerous benefits to small businesses that work directly with clients.

This insurance policy maintains your business’s financial stability in case a competitor or a client sues you.

Since general liability insurance offers essential coverage, most small business owners purchase the policy after opening their business. Generally, general liability coverage is not a legal requirement.

However, it is compulsory for specific industries such as construction. Besides, it may be required by clients, mortgage companies, and landlords.

General Liability Insurance for Contractors

If you are a contractor, you may only need general liability coverage rather than a complete BOP. For instance, you may not possess a commercial property that needs property insurance, to cover employees’ payments or other operational costs.

However, you are still prone to liability risks due to your work. You may be entitled to receive general liability insurance coverage without the additional packages in a BOP. The Progressive Advantage Business Program facilitates this.

General Liability Insurance Cost

As of 2019, the average monthly cost for a general liability insurance coverage was $53. Note that this is just an average figure, not what you will be required to pay. The specific features of a business determine the rates.

It is also crucial to use money-saving tips and policy rating factors to enable you to determine how to protect your business at a fair price.

Business Owners Policy or BOP

General liability plus other insurance packages are available in BOPs as facilitated by the Progressive Advantage Business Program.

If you require protection of things such as personal property used for business or commercial properties like storage facilities and garages, you may need the protection offered in a BOP.

Importance of General Liability Insurance Coverage

A general liability insurance policy is essential in protecting your business. The following are some reasons why you should consider purchasing the policy:

Protecting the Assets of your Business

As you operate a business, you will have to interact with your supplier, customer, vendors, other companies, and the general public.

In business, there are various human errors since nobody is perfect. Negligence or mistakes can lead to an accident that may cause injuries to the people you are dealing with.

When something goes wrong, your business will be responsible for the losses and damages. Although some claims are manageable, a costly claim can lead to an enormous cost to your company.

For instance, an accident that involves hazardous materials can spoil the surroundings and cause serious injuries to the individuals around.

This can result in an expensive claim. But, if you possess a general liability policy, you can protect your business and its assets by transferring all financial and legal responsibilities to your insurance provider.

Protecting Your Clients

Possessing an appropriate insurance policy provides a positive picture to your customers. Potential clients are most likely to opt for a business with general liability coverage. They consider the business as a dependable company in case smoothing goes wrong.

By possessing a commercial general liability insurance coverage, you can reassure your clients that they are protected. This will boost their confidence in your business.

Helps in Enhancing Client Base

Today, every business is prone to various risks. Therefore, customers expect companies to be appropriately insured before partnering with them. Some businesses, such as construction companies, are exposed to more risks compared to others.

Possessing insurance coverage can be an excellent tool to deal with your competitors. Being properly insured can attract many clients and improve your customer base.

Enhancing Your Business Reputation

You can use your general liability insurance to promote your company by stating you are fully insured and licensed.

It can give your clients an official guarantee. GL is mostly useful for small companies. This type of promotion can improve the reputation of your business.

Peace of Mind

Besides anything else, having general liability insurance for your business can guarantee peace of mind. Currently, all industries in the business world are stressful; therefore, you need a sense of safety.

General liability coverage can enhance your business growth since you will not have many things to think about.