There’s always the risk of an accident, no matter how careful you are. For businesses, accidents can create serious legal and financial problems. Consider this startling statistic: slip-and-fall accidents alone account for $70 billion in annual compensation and medical costs for U.S. businesses.
SEE ALSO: What is General Liability Insurance?
General Liability Basics
If an accident does happen, general liability insurance can help your company and the injured person cope with the situation. In general, these policies cover your business, your employees, medical expenses of the injured person, and damages to other people’s property.
General liabiltiy insurance can also save your company thousands, even millions, in legal fees and settlement costs associated with a lawsuit. That’s why all businesses, including small businesses, should consider this type of coverage. It can help a company survive what otherwise might be a devastating financial blow.
Business owners sometimes balk at getting general liabilty insurance because they don’t want to invest the money. They assume their risk is minimal. But that’s the thing about accidents: They don’t seem likely until the moment they happen.
Here are some scenarios where general liability insurance could help:
- Inside your business, a customer stumbles on broken flooring and is injured.
- During an inspection in your warehouse, shelving and boxes collapse on the inspector.
- A piece of your building comes loose and injures someone on a public walkway.
- One of your employees leaves the water running in a customer’s home, doing major damage.
- A class action lawsuit is filed against your business for unsafe or misleading practices.
Advertising and Libel Issues
Maybe you’re not swayed by the examples above, because they don’t seem to apply to your business. Keep reading, because your general liabilty risks go far beyond accidents and bodily injury.
Advertising injury, ownership infringement, libel, and slander are also addressed by general liabilty policies. And at $50,000 in costs per incident, reputational harm is the #1 most costly type of damage for U.S. small businesses.
Here are some example situations that involve advertising and reputational harm:
- Your employee is accused of spreading destructive rumors about a competitor.
- A former employee claims you are continuing to make money off something they copyrighted.
- A customer claims your business practices defamed them and caused psychological damage.
- Someone alleges your company stole their branding or advertising idea.
- A client claims your employee invaded their privacy to access trade secrets.
Is it Worth The Investment?
In a word, yes. general liabilty insurance is worth the money and should be at the top of your list for commercial insurance.
The consumer cost information site How Much investigated the annual cost of GL insurance for U.S. businesses. They found that the typical cost for all businesses ranged from $250 to $2,000 and the typical cost for small businesses was about $550 a year.
Your actual general liablity cost is calculated according to your industry, products, history, payroll, annual revenue, and other business factors. If you’re ready for a custom quote, click the link below to receive one that’s fast and free.