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Every LLC business will need a liability insurance policy so as to ensure that under no circumstances, the business owners will have to bear the costs of the damages, be it the bodily injuries, property damage, invasion of privacy, legal defense costs, and others. But what is general liability insurance? This page will tell you everything.
Several types of commercial umbrella insurance plans are there, including professional liability insurance and workers’ compensation insurance. However, it is the liability business insurance that acts as the most important coverage plan for any kind of LLC, be it a foreign LLC, a domestic LLC, a single-member LLC, and so on.
On this page, you’ll learn about the following:
What is General Liability Insurance?
While opening a limited liability company (LLC), you should be aware of the several business risks associated with the business. Amongst these, it is the liability risks that every business owner should be concerned about. This is where the general liability insurance plan comes into the role play.
A liability insurance policy will help you to cover the costs of injuries incurred on your employees or on yourself or the other members while being on the business property. Apart from this, the liability property insurance policy will also cover the legal costs that you might have to bear while fighting against a lawsuit or paying for penalties levied on you.
Risks Covered by General Liability Insurance
Professional liability insurance will cover some of the risks that will be present for your business. Here is the list of all the risk factors that come under the coverage plans of the liability policies.
- Bodily injuries will include any kind of physical injury caused to your employee. It will also include a third-party bodily injury within your business property
- Property damage, either to your or your client’s property under your supervision
- Medical expenses for any treatment done for injuries gained within your business premises
- Advertising injury caused by your advertisements to any other business or client
- Legal defense fees
How Much General Liability Insurance Costs
The average general liability insurance cost will depend on the state where your LLC is situated. However, the general limit for liability insurance coverage ranges between $300 and $1000 per year. The exact business liability insurance cost will depend on several factors, which we have discussed below.
Variables Affecting General Liability Insurance Fee
- If your business is exposed to greater risks than others, your liability insurance cover will cost you more.
- Location of the business, generally based on the ZIP code
- The number of employees you have and the annual payroll amount
- Amount of coverage that is payable per incident related to your business
- Total coverage amount payable per policy period
- Deductibles
How to Get General Liability Insurance for LLC
It is not an easy task to get the liability insurance coverage plan for the businesses. Many factors must be considered when you will choose commercial insurance for protecting your liabilities and assets.
- Collect the required information and documents
Your first task for buying general liability insurance is to gain more information pieces about the same. You need to ask about the requirements your business must meet to take this insurance policy. Besides, you also need to know the documents you have to submit at the time of applying for the commercial liability insurance plan.
- Hire a commercial agent
For having management liability insurance, you need to look for a professional agent working in a popular private insurance company. As a responsible business owner, you need the agent’s help to understand the details of the insurance coverages that will help you in saving operating expenses.
- Determine the needs of your business
For getting the certificate of insurance, all the businesses need to determine the needs. For example, if you deal with cars, you will need commercial auto insurance. For LLCs having a huge number of employees, compensation insurance is a must. If the company deals with manufacturing, insurance for contractors will be ideal. You can also look for insurance cover theft if you want to protect the tangible assets of your business.
- Evaluate the liability insurance options
No matter how many common insurance policies you have looked at so far, you need to decide which particular liability and life insurance policy will be perfect for your business. Let’s say you want to cover work-related injuries, but the policy you have chosen provides benefits for bodily injury liability. In this case, the policy wouldn’t be suitable for you. This is why for choosing the type of insurance, you need to understand the options.
- Get the quote for the liability insurance.
Lastly, you need to get the liability insurance quotes to understand what the limits of insurance are, how much you need to pay as a premium. The benefits you will get as employers, and so on.
Benefits of General Liability Insurance for LLC
Following are the areas which will be covered under your policy as per the general liability insurance definition.
- Liability claim of assets
- Employee injuries
- Copyright infringement injuries of other businesses
- Auto insurance policy plans
- Coverage for damages to your property
- Accident and slander coverage
- Personal injury liability coverage
- Company advertising injury
F.A.Qs
When you take the insurance to cover your business operations, you need to understand the limits applicable to different companies and professional services. Based on the type of business and the normal business operations, the limit will vary.
Yes, your insurance plan will cover the medical claims for an injury that your employees might receive. Apart from this, the policy will also cover work-related personal injury.
Yes, the policies will also cover the business interruption expenses caused due to theft or damage to products your LLC business deals in.
What is General Liability Insurance for Contractors
General Liability insurance protects the small business owners from lawsuits and aids in completing contracts and leases. it also covers business risks like customer property damage, advertising injury, etc.
One of the key aspects of General Liability Insurance is that it covers bodily injury and property damage caused by the contractor or their employees. This means that if a contractor’s employee accidentally injures someone on the job site or damages a client’s property, the insurance policy will cover the costs of medical bills or property repairs. Without this coverage, contractors could be held personally liable for such incidents, leading to financial ruin and potential legal consequences.
Another important aspect of General Liability Insurance is that it covers the costs of legal defense if the contractor is sued by a client or third party for bodily injury or property damage. These legal costs can add up quickly, and having the insurance coverage in place can provide peace of mind and financial protection in the event of a lawsuit.
Additionally, General Liability Insurance can also provide coverage for advertising injuries, such as libel, slander, or copyright infringement. In today’s digital age, contractors often engage in marketing and advertising efforts to promote their services. Having this coverage can protect contractors from potential lawsuits related to their advertising activities.
It is important for contractors to carefully review their General Liability Insurance policy to understand the specific coverage limits, exclusions, and deductibles. Not all policies are created equal, and contractors should work with an experienced insurance agent to find the right policy for their individual needs.
While General Liability Insurance is not legally required for contractors in all states, it is highly recommended as a safeguard against unforeseen accidents and lawsuits that can arise in the construction industry. Many clients also require contractors to carry General Liability Insurance as a condition of their contract, demonstrating a level of professionalism and commitment to quality workmanship.
In conclusion, General Liability Insurance for contractors is a crucial coverage that provides protection against a variety of risks in the construction industry. It offers financial protection in the event of accidents, injuries, property damage, and lawsuits, ensuring that contractors can focus on their work with peace of mind. Contractors should carefully review their policy and work with an experienced insurance agent to find the right coverage for their individual needs.
In Conclusion
It is important to have insurance while running your business. You never know when and what kind of risks can emerge. General Liability Insurance is one such protection for your LLC that will protect your assets and business if such unpleasant threats occur. I have listed down the details of General Liability Insurance as much as possible in this article. Share your feedback with us in the comment section below.