No matter what kind of business you run, you need protection against all types of threats, including lawsuits. General liability is a crucial part of any business insurance package and an affordable way to protect your Michigan business.
What Does Liability Insurance Protect?
General Liability insurance protects a business against lawsuits and claims arising from bodily injury, property damage, or reputational harm. Liability insurance reimburses policyholders for the legal costs, including attorney, court, and settlement fees, regardless of whether they are at fault. It is often required by state law, industry regulations, or your clients.
- Bodily Injury/Property Damage: Claims of damage caused by your actions to a third party.
- Advertising Injury: Allegations that you libel or slandered someone or violated their rights.
- Reputational Harm: Claims that you damaged the reputation of a business.
Who Needs General Liability Insurance Coverage?
A general liability policy covers a wide range of exposures across a wide range of industries.
Companies that purchase general liability insurance:
- Contractors that work on or at a third-party property
- Businesses that market via advertising
- Businesses that meet with clients face to face
- Businesses that are legally required to maintain general liability coverage
What Does General Liability Insurance Cover?
The following scenarios are typically covered by general liability, as detailed on TrustedChoice.com:
- Claims relating to bodily injury: If a third party, such as a customer, slips and falls on your business premises or otherwise injures themselves and blames you, general liability insurance will reimburse for legal costs.
- Claims relating to property damage: If a third party, such as a customer, claims to have had their personal property damaged due to your business, general liability will reimburse for legal costs.
- Claims relating to advertising injury: If your business’s advertisements cause some sort of harm to a third party, such as emotional harm, general liability insurance will cover the legal costs.
- Medical payments: General liability insurance will also cover medical costs stemming from injured third parties on your business premises or who claim to have been injured by your business’s operations. Coverage kicks in regardless of actual fault.
Why is Liability Coverage Important?
Having no liability insurance is like driving without a car insurance policy. You’re taking a huge risk and could land yourself in a very bad situation.
Liability insurance protects your business from being sued if something goes wrong. It’s the first step in protecting yourself from litigation, and is often the only thing that stands between you and an out-of-control lawsuit.
It’s not uncommon for someone to file a frivolous lawsuit, hoping that the other party is too busy defending themselves to respond in kind. If your business doesn’t have liability insurance, it could be open to all kinds of lawsuits, even if they have no merit. Having a good liability insurance policy in place will help defend your company against these frivolous lawsuits.
Liability Insurance Cost
Liability insurance for Michigan businesses can range in price depending on numerous factors, and companies are often rated based on the unique risks they face.
Other cost factors may include:
- Industry type
- Number of employees
- History of claims
- Annual profits
- Additional coverages
Keep in mind that general liability insurance is just one type of coverage needed as you may have liability risks beyond the scope of public liability insurance.
Depending on the type of work you do, you might need additional policies:
Commercial Umbrella Insurance: Provides extra protection for high-risk businesses. Under umbrella insurance, your policy limit is increased, meaning your insurer can cover more expensive lawsuits.
Professional Liability Insurance: Protect your business from consequential loss resulting from negligence claims associated with your professional service. Professional liability claims involve allegations whereby the customer alleges they lost revenue or incurred expense because of the negligent rendering of professional services.
Workers Compensation Insurance: Worker compensation insurance gives your employees benefits to help recover from a work-related injury or illness. It can also benefit your employee’s families if they lose their lives in a workplace accident.
Cyber Liability Coverage: Cyber-related losses generally involve loss or damage to data and other intangible assets, including customer data, intellectual property, and related expenses associated with a loss event.
Business Property Insurance: Commercial property insurance is essential for business owners, even those running a home-based business. The concept of “Property” can include various things, such as lost income, business interruption, buildings, computers, cash, and valuable papers.
To learn more about crucial business owners’ policies, check out our guide to Understanding Business Insurance.
Advantages of Independent Agents
When you research your options for purchasing general liability insurance, you will encounter independent agents’ and ‘captive agents.’ Captive agents work for only one insurance company. An independent agent represents multiple insurance companies whose primary focus is on you, not the carrier.
No one is more qualified to help your business find the best liability coverage than an independent insurance agent. Independent agents search multiple carriers to find providers that sell liability insurance, deliver quotes from many sources, and help you compare to find the best combination of coverage and cost.
Having no liability insurance is like driving without a car insurance policy. You’re taking a huge risk and could land yourself in a very bad situation. It’s the first step in protecting yourself from litigation and is often the only thing that stands between you and an out-of-control lawsuit.
Take Action to Safeguard Your Company
Find out how Mason-McBride can help protect your business and request a proposal.
Article By Jamie Parry