TUESDAY, AUGUST 25, 2020
The majority of businesses fail within the first 5 years of operation due to a lack of funds. A single lawsuit could drain a business’ assets, especially newer businesses that don’t have enough savings to fall back on. A general liability insurance policy can help provide cushion for businesses in the face of a lawsuit. 
What Does General Liability Insurance Cover?
General liability insurance covers three main areas:
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Bodily injury provides compensation for medical expenses to people that are injured on the business property.
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Property damage covers expenses related to property damage caused by everyday business operations.
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Personal and advertising injury covers expenses related to lawsuits concerning libel, slander, copyright infringement, invasion of privacy, false arrest, malicious prosecution and more.
Each of these coverages provide compensation to the business for legal fees such as defense costs and settlement expenses. Some businesses need higher limits of liability than offered by their policy. General liability insurance can be enhanced by an umbrella liability insurance policy. Umbrella liability insurance fills in the gaps left over by your other liability policies. For example, say your business’ liability insurance caps at $1 million and a lawsuit ends up costing over $2 million. An umbrella liability insurance policy will step in once your general liability caps to pay for the remaining balance. This policy can also apply to other liability policies.
Who Needs General Liability Insurance?
Essentially every business needs general liability. Whether you’re an independent contractor, restaurant owner, or auto dealer, you will face accidents that could result in a devastating lawsuit.
General liability insurance is also often required for certain professionals to obtain certain licenses in order to operate. Lenders and investors may also require businesses to purchase and maintain general liability insurance in order to protect their interest.
How Much is General Liability Insurance?
The cost of general liability insurance varies depending on a variety of factors, including:
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Location
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Industry
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Size of the business
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Coverage limits
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Claims history
Industries or businesses with a long history of general liability claims will typically pay more for general liability insurance. On average, a business may pay around $42 a month, or $500 a year, for general liability depending on the above factors.
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It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
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