General liability insurance is a safety net that all businesses should have. It protects your assets, your employees, your customers and so much more. For example, let’s say you own a warehouse, where employees drive forklifts and often stack materials high up in the rafters. Well a lot can happen in a warehouse with heavy machinery and the like. If someone other than an employee were to get their toe ran over by a forklift or suffer some other sort of injury, general liability insurance can cover the cost of the medical care for that employee and also protect the business from any legal defense or settlement that may be awarded if you are successfully sued.
Liability insurance can also protect you against any liability as a tenant if you cause damage to a rented property and can even cover the cost to rebuild in the event of a fire with fire legal liability coverage.
So is liability insurance required for your business? This is a question that is tough to answer without knowing what kind of business you are running and what kind of risks there may be, but if you sit down with your local independent insurance agent, they will be able to discuss all of the benefits as well as answer business specific questions.
But the short answer is yes; liability insurance is highly recommended if you are a business owner. First of all liability insurance is not a hefty investment, costing an average of $750 to $2,000 annually for the average small business, depending on your line of business and the coverage needs. This amount is a lot less than the high costs you may facefor legal representation when being sued. Most mortgagees or people you are leasing equipment from will require liability insurance and probably ask for a certificate of insurance proving you have coverage in place.
Liability insurance can generally be purchased on its own, but it also can be included as part of a Business Owner’s Policy, which bundles liability and property insurance into one policy.
As mentioned before, liability insurance coverage varies, and the amount that you will need all depends on the type of business you have. For example a building contractor is going to need more coverage than a accountant because as the accountant sits at a desk all day, the contractor faces high risk situations and thus has a higher likelihood of an accident or injury. The norm is becoming $1,000,000 per person and $2,000,000 per occurrence. If you fall in the lower risk category than you may consider a Business Owner’s Policy, which combines liability and property insurance at a cost-effective rate.
So how does it work? Like most insurance plans, your liability policy will outline the maximum amount the insurance company will pay against a liability claim. If your small business gets sued for $300,000 for medical costs and if your coverage only covers you for $200,000, then you would be left to pay out of pocket for the excess award. To decide how much coverage you need, it is important to know your business and sit down with a local independent insurance agent to discuss various levels of coverage. The recent large fertilizer explosion in Texas emphasizes the need for adequate limits.
Certificate of Insurance for General Liability Insurance
As most business owners know, it is important to have quality commercial general liability insurance coverage. An adequate CGL policy can safeguard company owners, employees, resources, and operations in case of a loss or claim. Typically, a commercial general liability policy can cover property damage or personal injury that happens as a result of an occurrence, or personal or advertising injury caused by an offense covered under a policy’s terms. A CGL policy can also cover medical expenses resulting from a person being injured in an accident on the premises of a business, or as a result of its operations. A local independent insurance agent can explain the options for CGL insurance available to business owners, and answer their questions about supplementing existing coverage, or buying a new policy.
As a licensed independent insurance agent can describe in greater detail, a certificate of insurance can outline a CGL policy’s terms and provide proof of insurance for a business. A certificate of insurance may also be issued alongside an endorsement to a policy in the event that a named insured should request that another person or entity be named as an additional insured. An independent insurance agent might explain how a certificate of insurance typically contains information about a company, including its name and address, the kinds of commercial insurance coverage it has, the name of its insurer, the limits under its CGL policy, the policy number, and dates of coverage.
In connecting with business owners, a seasoned independent commercial insurance agent might mention that while a certificate of insurance offers proof of insurance for an organization, the terms of a CGL policy itself detail the scope of the coverage, and any exclusions or limitations. Also, an independent insurance agent may discuss how the holder of a certificate of insurance might not be insured under a commercial general liability policy, unless a corresponding endorsement is created.
By meeting with a seasoned independent insurance agent, business owners can gain an understanding of the options for CGL coverage suited to the needs of their organization, and can learn more about the purpose of having a certificate of insurance. With a CGL policy purchased through a local independent insurance agent, along with a certificate of insurance issued to a holder, business owners know that if they need proof of insurance, or in the event of a claim or loss, their company and its assets are covered.
General Liability – Premises and Operations Coverage
As business owners know, general liability commercial insurance affords protection for businesses and their owners in case of a claim of property damage, personal injury, false advertising, or slander against a company. It is important for business owners to make sure that premises and operations coverage is included in their company’s commercial general liability insurance policy to shield them and their business from potential liability in connection with a claim related to a business’s operations, or as a result of an incident on the premises. An independent commercial insurance agent, familiar with the concerns of local business owners when it comes to purchasing comprehensive general liability insurance with premises and operations coverage, will assist them in choosing the right policy.
Business owners may or may not own the facilities in which their company operates, but they are expected to maintain it and keep it reasonably safe. General liability insurance protects business owners and their company from legal or financial liability in the event of property damage, or physical harm to someone at the facilities, such as a slip-and-fall. It can also cover damage or injury as a result of a business’s operations, like an injury to a motorist who is hit by a brick dropped by a contractor while traveling under a bridge. An independent insurance agent will explain the options for commercial general liability coverage that are available to business owners, and discuss the benefits of having premises and operations coverage included in a business insurance policy.
In meeting with business owners to discuss their concerns and requirements when it comes to commercial general liability insurance, a seasoned independent insurance agent will likely ask a variety of questions to assess the kind of insurance that is best suited to a particular company. For instance, an independent insurance agent may inquire about a business’s facilities, including the layout of the building, whether there are multiple stories connected by elevators or stairs, and if there is any machinery or equipment used or stored on site. A licensed insurance agent might also ask about whether a company operates a warehouse, the number of employees working for an organization, and if automobiles or other vehicles are used by workers in the course of their employment. Using these and other factors, an independent insurance agent will assess the options for commercial general liability insurance, and premises and operations coverage, that fit a business’s unique needs.
By reaching out to a trusted independent insurance agent in the area, local business owners can gain an understanding of the importance of having comprehensive commercial general liability coverage for their business. They can also learn more about the advantages of having premises and operations coverage in their business insurance policies, and get answers to their questions about modifying existing commercial general liability insurance to include premises and operations coverage. With the help of a local independent insurance agent in selecting commercial coverage for their company, business owners know that in case of an injury or property damage claim stemming from their organization’s operations, or as a result of an incident on-site, their company can be covered.
First Named Insured in Commercial General Liability Insurance
Whether they provide services to customers or clients, or produce goods at a low or high volume, business owners know the value of having quality commercial general liability insurance for their company. In evaluating the options for coverage under commercial general liability insurance, and choosing the right policy to fit their organization’s needs, business owners must make a decision as to the party that will be the first named insured in the declarations of a policy. An experienced independent commercial insurance agent will assist business owners in choosing a CGL policy, and determining the proper party to serve as the first named insured.
CGL policies cover risks associated with business practices involving a company’s locations, and any losses suffered by a business, unless they are limited or excluded under its provisions. Typically, a commercial general liability policy covers bodily injury or property damage caused by an occurrence, as defined under the policy’s terms, a personal injury or advertising injury caused by an offense covered under the policy, or the medical costs associated with a personal injury as a result of an accident at a company’s facilities, or caused by a business’s operations. An independent insurance agent can discuss the available options for commercial general liability coverage, and the implications of a party being named as the first insured under a policy.
In evaluating the options for the party to be the first named insured under a commercial general liability insurance policy, an independent insurance agent will probably ask about the organizational structure of a business, such as the kinds of tasks performed by employees, the roles of an entity’s board of directors or officers, and the size of a business, along with the location or locations of its facilities. As an independent insurance agent can explain, depending on the provisions of a CGL policy, the first named insured takes on the obligations and duties under the policy, whether or not other insureds are named. Also, as an independent insurance agent may point out, the first named insured is the individual or entity that an insurer must notify in the event a policy is to be cancelled or not renewed, and in such a case, the party to receive the premium refund.
With the help of a trusted licensed independent commercial insurance agent in the area, local business owners can choose a dependable CGL policy, and designate a party to be the first named insured under its terms. Commercial general liability coverage purchase through a local independent insurance agent can provide business owners with the peace of mind of knowing that in the event of an unexpected loss or claim, their organization is secure to the extent of the policy, and the first named insured under their policy is covered to that same level.
General Liability Insurance – Additional Insureds
Business owners have many factors to consider in selecting commercial general liability insurance coverage. Besides the first named insured on a business insurance policy, they must determine whether there will be any additional insureds covered under a policy, and whether or not they will be named insureds. Although CGL policies cover a named insured, they can also cover additional insureds that may or may not be named. A local independent insurance agent will guide business owners through the process of choosing a commercial general liability policy that affords adequate coverage.
In connecting with local business owners, an independent insurance agent may describe how a named insured under a CGL policy is different from an additional insured, which can be a person or business entity. An additional insured, like a business’s director, or employee, is typically named in an endorsement to a commercial general liability policy, which goes along with a certificate of insurance. An independent insurance agent will explain that an additional insured may be protected by the coverage given to insureds under the provisions of a policy, or as set forth in an endorsement, but also will describe how policy rights may be broader for a named insured, than for an additional insured under a CGL policy.
In meeting with local business owners concerning commercial general liability insurance, an independent insurance agent will likely explain that most CGL policies provide coverage for additional insureds only for a claim of vicarious liability arising out of an activity by the named insured on the policy. An experienced independent insurance agent may also discuss how additional insureds on a CGL policy may not be notified about any changes to a policy’s terms, or even its cancellation or non-renewal. Also, an independent insurance agent might mention that even if a corporate entity or other organization is named as an additional insured on a commercial general liability policy, its employees, volunteers, and contractors are probably not named insureds.
To determine the CGL coverage best suited to a particular business, an independent insurance agent will likely inquire about a company’s potential liability exposures at locations where it operates, or performs services. Also, in evaluating options for people or entities to be named or additional insureds on a policy, an independent agent might ask about an organization’s structure, including the number of employees and contractors performing work for a business, the structure of its board of directors, and the nature of tasks performed by each worker.
A seasoned local independent commercial insurance agent will help business owners select a CGL policy that covers a named insured and additional insureds, and can sufficiently protect a company’s finances, structure, and employees from potential legal or financial exposure in the event of a claim. With a policy through an independent insurance agent, owners know that their organization and its operations are secure to the extent of the policy.
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