Small Business General Liability Insurance Overview: A quick beginner’s guide to policies

Every business has its own needs, but you still want to make sure you’re covered by some insurance, no matter how small your business is. In short, small business general liability insurance tends to cover things like personal liability for members and the consequences associated with third-party claims for property damage/injury. You can add additional items of medical injury to yourself and damage to your own property.

When looking at CGL policies, you’ll see terms like “General Aggregate Limit.” This refers to advertising or personal injury, medical payments and/or fire damage. “Operating coverage” refers to the basic coverage provided for property damage and personal injury resulting from your or an employee’s negligence.

You can also see “Limit of products and completed operations” depending on your industry. This coverage includes protection for those who manufacture or sell a particular product, or are contractors who provide services. Of course, if damage occurs and your product or negligent service may be responsible, you will face a lawsuit. This is a type of separate aggregate limit and the claims by its nature will not reduce the general aggregate limit, although it will still be subject to limits such as the “Per Incurrence Limit” for each claim.

General Liability Insurance for Small Business Limits and Claims

“Limit per occurrence” refers to the maximum amount the policy will pay for a single claim arising out of your personal injury or your advertising injury/operations/products and completed operations. Each of these requirements WILL lower the separate aggregate limit.

A few other terms you’ll find include personal and advertising injury, fire injury, medical payments, bodily injury, and third party property damage, all of which are self-explanatory.

Your industry will also play a role in the exact type of coverage you need. When searching for small business general liability insurance, see if there is a custom policy available. Choose a company that specializes in businesses like yours and get coverage tailored to risks prevalent in your particular area. Consider the risks you are likely to face that may not be covered by a GCL or Business Owner’s Policy (BOP) and have those risks included in your coverage.

Another very important thing to look for is claim sensitivity. Only get small business general liability insurance from a company that has a lot of positive reviews—especially regarding its claims response time. Claims must be easy and quick to process. One particular provider to start with is Hiscox Business Insurance. The prices are ticket prices, the claim process is quick and Hiscox offers free, instant quotes on its website.

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