General Liability Insurance

General Liability Insurance for Business

General liability insurance is the most important insurance coverage a business can obtain. In most cases, it is the first line of insurance purchased by a business. GL is required by law in most states; additionally, businesses are often required to purchase coverage with most contracts for leases, loans, and work performed for others.

General liability insurance protects business owners from lawsuits and accidents.

Businesses need general liability in order to protect their business and their personal assets. There are two primary components included in a general liability policy: a) public liability, and b) product liability. Both parts of GL insurance provide coverage for property damage and bodily injury to 3rd parties, or the general public. GL coverage protects you from both direct damage and indirect damage caused by the actions of your business or employees.

Commercial General Liability Insurance Coverage

The difference between public liability and product liability included in a general liability policy is easy to explain. Public liability refers members of the public such as customers, visitors, sub-contractors, and even trespassers. When someone is injured or their property is damaged a business may be held liable.

Two simple examples: A customer slips in front of your entrance due to ice from a winter storm (your business may be liable). An installer is in someone’s home and accidentally breaks a window or a home furnishing (your business may be liable).

Commercial general liability protects business owners from third-party liabilities.
Product liability generally refers to a product or work completed by a business. Manufacturers and distributors are held accountable for the safety of their products. Service companies are also held accountable for the quality of their work. General liability coverage protects businesses when they have a claim against their product or service. If your business builds a deck for a homeowner and the deck collapses 1 year later and causes injury or damage, your business may be liable. If you release a product that causes injury or damage to others, your business may also be held liable.

Cost of General Liability Insurance

Business owners who decide not to buy coverage for general liability due to the cost of the insurance place their livelihood and business at risk. The legal costs of defending a claim, or the cost or settling a claim, will likely be much higher than years of paying insurance premiums. In some cases, otherwise good businesses can be closed because of uninsured liability claims. This can happen even when a business was not at fault for the accident.

The cost of general liability insurance can be significantly different from one insurance carrier to the next.

The cost of liability insurance varies from business to business. For most small business owners, premiums can vary from a few hundred dollars annually to a few thousand dollars. Because most general liability policies are based on a rate per $1,000 of gross sales or gross payroll, larger gross sales and/or payrolls will equate to higher premiums. However, as gross sales and payroll increase, the rate per $1,000 reduces and allows for rate discounting and credits.

General Liability Insurance Quote

Insurance companies develop their own pricing and rates for general liability insurance. They also develop their own underwriting guidelines, premium discounts, and credit programs. This guarantees that it is very unlikely to get identical quotes from two separate insurance carriers. The overall price you pay for general liability depends, in a large part, on the carriers appetite for your type of business. It also depends on your agents access to numerous carriers and their ability to effectively understand and sell your business to the insurance companies offering liability quotes.

Call 800-900-8657 to Speak to an Agent or
Have Us Contact You Start Your Quote Process
Get an Instant Online Quote

Whether you are looking for an instant online GL quote, or you want a licensed agent to shop your business insurance with multiple markets, our business insurance Specialists and General Liability Shop.com have access to more insurance companies than most local and state agencies. We’ve developed specialized insurance products that help streamline the quote process and provide the lowest general liability rates for most types of businesses.

Call 800-900-8657 today to speak with a Specialist, or start your general liability quote here online.

General Liability Insurance Class Codes

The liability classification assigned to your policy will determine the rate per $1,000 your business pays for coverage. It’s not uncommon for businesses to operate in more than one classification under their general liability policy. The rates associated with each class code will determine the cost of the premium and will vary by insurance company. Additionally, there may be multiple sub-classification within a give SIC code or business type. As an example, consider classification for painters. Insurance companies will have a separate classification for interior painters and exterior painters. And residential painting is different than commercial painting or auto painting. Finally, there will be even more codes for specialty contractors such as a bridge or water tower painting.

business liability classification codes affect the cost and coverage on insurance.

The details of the business operation are crucial in both pricing and coverage. Some business owners pay too much for general liability insurance because they are classified in a more expensive GL class. Others leave their business vulnerable because they don’t have the proper insurance coverage designed to protect the true exposures for their business. Agents play a vital role properly classifying a business so that insurance companies accurately price and cover the business.

Small Business General Liability

Many small business owners shopping for general liability insurance lack the information needed to make the best decisions about their GL coverage. Unfortunately, many insurance agents who don’t specialize in commercial general liability insurance lack the skill set to properly advise and educate small business owners. Its important for small business owners discuss their business in great detail with their agent, including business operations, assets, contracts, payroll, and employees.

Business owners who need general liability insurance coverage may benefit more from purchasing a BOP as they provide more coverage at a discounted price.

Learn more about a Business Owners Policy.