What to know about general liability policy

One of the keys to making a new business last in Rochester is to build in protections so that the company does not fall prey to lawsuits that could deplete its resources or drive it into bankruptcy. Investing your company with general commercial liability insurance is one way you can shield your business in the event another party brings a suit against your company for damages. If you are considering buying insurance for your business, here are some important things you should know.

According to FitSmallBusiness, general liability insurance for businesses may take different forms. Bodily injury policy covers you when a person suffers injury from one of your products or from your company’s negligence. Property damage coverage will cover damage done to a property by your business. If a third party is injured on your company property, medical payment coverage will handle the party’s medical bills. In the event a third party endures loss due to copyright infringement or defamation committed by someone working for your company, a personal and advertising injury policy can go into effect.

Like any insurance policy, you will have to pay premiums, though how large your premiums are going to be shall depend on the industry you work in. General liability is typically higher if you run a construction or cleaning business because these industries perform work on other people’s property, which heightens the risk of property damage. Industries like restaurants or retail outlets also involve high premiums because of the higher level of personal traffic, which makes personal injury more likely.

By contrast, businesses that involve one or a handful of people laboring inside an office or at someone’s home will generally not involve high premiums since there is little pedestrian traffic and not a lot of risk that the people in the business would damage another person’s property. Instead, the risks these kinds of businesses face is defaming a person or infringing on another person’s intellectual property.

Business owners should be aware that their general liability policy might not provide limits that are high enough. According to Chron.com, liability policies may fall short if companies are at greater risk of being sued or if the company owns assets and property of high value. To compensate for such eventualities, a business owner can purchase an additional commercial umbrella policy that kicks in when a general liability policy has reached its limit.

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