No business owner wants to believe that a customer could be injured on their property, or that something could damage their building, but this is the unfortunate truth: accidents happen. Someone trips over a display, a brick falls from an aging building onto a customer’s car, or you fail to vet an advertisement correctly, leading to copyright infringement. In fact, if you’re fortunate enough to be successful, over the years you’ll likely experience several different incidents that you’ll be considered liable for – and that’s why your business needs general liability insurance.
General liability insurance is just one of several policies businesses need to invest in, to protect themselves and others. While you’re legally required to have such a policy, that’s not the only reason to sign up. Rather, policies like general liability are part of a larger safety net, one which assumes you’ll encounter failures and accidents by running a business. By embracing a broad set of insurance policies, starting with general liability insurance, though, you offer your business a strong foundation and foster trust between ownership, employees, and customers.
General Liability Basics
In order to understand the role of general liability insurance policies for businesses, it’s helpful to put such policies in context of the multiple types of insurance that businesses require. For example, in addition to general liability insurance, most businesses will have property insurance, workers’ compensation insurance, and business interruption insurance. They may also have other, more specialized policies, such as product liability insurance, vehicle insurance, or home-based business insurance.
After accounting for all of these other policies, what’s left for general liability insurance to cover? Though exact coverage varies by policy, general liability insurance covers injuries to customers (injuries to staff fall under workers’ compensation insurance), damage to both business and personal property, advertising liabilities, and legal costs. For LLCs, such policies are generally quite affordable, and they can prevent owners from facing a significant financial burden in the event of an accident.
Having a general liability insurance policy clearly protects businesses from a variety of legal problems and costs, but that’s hardly the only reason businesses should have such a policy. In fact, when considered within the context of businesses as part of the broader community, it becomes clear that having appropriate insurance helps secure those community relationships.
The role of insurance policies in protecting businesses’ relationships to their communities is particularly notable when considering large companies. For example, after it was implicated in the 2018 Camp Fire, PG&E restructured their business to ensure they had access to the Wildfire Fund, an insurance policy for investor-owned utilities meant to help address and prevent future catastrophes. This was an exceptional case, but having the necessary liability insurance to address harm to workers, customers, and the community matters regardless of the size of your company.
Plan For Survival, Plan For Success
Ultimately, as a business owner, there are two main ways that you can think about general liability insurance. When things go wrong, such a policy can help your company weather the storm – you’ll survive the accident or legal conflict to work another day, and that survival is another chance at success. Without general liability insurance, you might not stay afloat long enough to start reaching your goals, but when you have a plan to survive the hard times, you open the doors to opportunity and better, more successful days.