Commercial liability is a type of insurance policy that provides coverage to a business for bodily injury, personal injury and property damage caused by the business’ operations, products, or injury that occurs on the business’ premises. Commercial general liability is considered comprehensive business insurance, though it does not cover all risks a business may face. Understanding the risks your business faces and having the right CGL coverage to protect you from those risks is an important step in safeguarding your operations.
What’s Required of a Business That Applies for General Liability Insurance?
From an insurance company’s perspective, a small business first needs to show that it isn’t a risky investment. Insurance companies look at your past history of insurance claims and the type of work you do. If they find any red flags that suggest your business is an extraordinary risk, they won’t offer to cover you.
For instance, insurers might not cover a juggler who specializes in throwing five chainsaws in the air while ice skating. It’s true. Insurance companies won’t exactly be lining up to cover that guy.
But usually, an insurance company will have no problems with the kind of work your business does. As long as you don’t work in high-risk industries and don’t have a history of being sued, insurance companies are likely to insure your business.
Do I need CGL insurance?
Some small business owners don’t know they need liability insurance, or think it’s too expensive. The truth is, no matter how small your business is—it’s still at risk for various forms of liability. In fact, the smaller your business is the worse the implications of a liability claim can be. At the bare minimum, every business should have a standard CGL policy to protect them from risk and loss. Some of the consequences of operating without CGL insurance may include:
1. If you’re found legally liable for bodily injury or property damage to a third party, your company may have to pay the costs associated with the legal process and any financial losses that stem from the lawsuit.
2. Your reputation with your clients/ customers could be severely damaged. Consumers need to feel a sense of trust with companies and brands. A lawsuit could shatter that sense of trust if handled poorly.
3. There are a lot of scenarios where you may be asked to provide proof of insurance. If your business participates in events such as tradeshows or markets, the venue will often request that participants provide a certificate of liability coverage. If you’re a contractor or skilled tradesperson, some of your customers will require proof of insurance prior to allowing you to conduct work on their
This type of insurance typically covers “the big three”: people, property, and personnel. These are the most common – and largest – areas of exposure for any business, and without the proper policy in place, you are opening yourself up to major financial losses if the worst should happen.
People – If an incident occurs on your premises that involves a third party, whether they incur bodily harm or damage to their personal effects, commercial insurance will normally help defer the costs of any related repairs, replacements, or medical bills.
Property – As a business owner, chances are you possess a fair bit of specialized gear, equipment, and/or technology. Not only does commercial insurance cover the unique belongings that keep your business running, but it can also protect a host of other supplies, furniture, and more.
Personal – Your employees deserve to be taken care of in the event of a workplace injury. As part of your commercial insurance package, a workers’ compensation policy can dispense funds to help cover the cost of a staff member’s medical care after an on-the-job incident.
What Coverage Do I Need in My General Liability Insurance Policy?
Good insurance companies make sure the insurance policy they write for you appropriately matches your business’s needs. General Liability Insurance policies are not “one size fits all.”; Each one should be customized.
For example, if you run a restaurant in a Seattle, you’ll want to make sure that you have plenty of slip-and-fall coverage to cover any injuries that occur at your store during the long rainy season. If you manufacture niche children’s toys, you’ll want to have product liability coverage to cover the cost of any lawsuits if children hurt themselves with your toys.
A good insurance broker prepares a sample insurance quote to fit the specific needs of your business and walks you through your options, helping you find the right fit.
From the day an entrepreneur starts a business, he exposes himself to certain risks. Even before the first employee is hired, a business is at risk, making it important to have the right insurance in place. One lawsuit or catastrophic event could be enough to wipe out a small business before it even has a chance to get off the ground.
Fortunately, businesses have access to a wide range of insurance types to protect them against these dangers. Here are some insurance types that a business must have in place as soon as possible.
• Professional liability insurance.
• Property insurance.
• Workers’ compensation insurance.
• Home-based businesses.
• Product liability insurance.
• Vehicle insurance.
• Business interruption insurance.
Utah Business Insurance
In the state of Utah, agriculture dominates the business industry, as the state focuses on cattle, calves and hogs, dairy products, hay, and greenhouse and nursery products.
General liability insurance in Utah is carefully planned to provide security and protection for small business owners from financial burdens that can occur from irresponsible acts, omissions, or both, caused by the employer or their employees that may result in physical injury or property damage. Contractual liabilities, liabilities from products sold, and accidents on the premises of the business are some of the more common types of exposures covered under general liability insurance. The injury or damage might be a result of negligence and accidental. General liability insurance for Utah businesses may be one policy or can be part of a package policy.
A package policy is an exclusive type of insurance policy for an owner of a Utahan entity that includes two or more different types of insurance into a single insurance policy, referred to as a bundle, although a package policy can also be planned in order to include any type of coverage which depends on the unique requirements of the organization. A package policy is essential to a business professional as it provides them with an excellent amount of flexibility to tailor a policy for the specific needs of the risk exposures of the company.
Commercial Property Insurance in Utahis a type of security coverage for different types of Utah-based commercial property, such as, essential documents, building, materials, equipment, furniture, inventory, and personal property. Commercial property insurance provides protection against different types of perils, including windstorm, hail, explosion, fire, natural disasters, theft, and lightning strikes. A variety of professional industries feel more protected with this sort of insurance, including retailers, not-for-profit entities, manufacturers, and businesses related to the service industry.
Business Liability Costs
Liability insurance costs in Utah can vary widely between insurance companies. Liability insurance rates are generally factored using a) the gross sales for the business, b) the gross payroll for employees and owners, c) the square footage of the premises and d) any sub-contractor exposures (if applicable). Insurance rates are developed at a rate per $1,000 utilizing one or more of the above factors.
A typical small business in Utah can expect to pay anywhere between $300 and $5,000 annually for their general liability policy. The final cost of liability coverage from one business to the next will vary significantly based on the SIC code or the insurance company’s own classification system for GL rating. Some additional factors used to develop insurance costs include the nature of your business, your physical location, prior claims experience, and your years in business.
There are many different types of policies to consider that offer coverage beyond the core needs of most businesses.
Read on to learn a little more about the commercial insurance coverage that is available to you and your business.
If, for example, a client slips on a wet floor at your business and is injured, their medical expenses are your responsibility. (Yikes.) Depending on the severity of the injury, the business owner could be sued to pay for the client’s:
• Physical therapy/rehabilitation costs
• Lost wages while they’re out recovering
These lawsuits get expensive quickly, which is why most business owners carry general liability insurance. This policy can pay for legal expenses related to third-party injuries.
Occupational injuries and accidents are often both unpredictable and costly. When employees are hurt at work, small business owners need worker’s compensation insurance to cover employee medical expenses and partial lost wages.
Many states require employers to purchase this policy as soon as they hire their first worker. However, even if it’s not required by law, it’s still a good idea for businesses to protect employees and business operations with this coverage. Otherwise, injured employees could sue to pay for their medical bills.
Breach of Contract
A business contract can cover a wide range of business operations. Like any contract, business contracts are enforceable by law so long as they contain all the elements of a valid contract (such as offer, acceptance, consideration, signing, etc.). Some business matters that are commonly the subject of a business contract may include:
• Shipment and delivery of goods;
• Sale, purchase, or transfer of a business;
• Construction of business buildings;
• Short-term joint business ventures; or
• Long-term agreements (such as deals involving cyclical shipments over many years).
If a business signs a contract with a client to provide services, and then doesn’t make good on that contract, they could be on the receiving end of a lawsuit. It could be sued for:
• Failing to make payments for goods;
• Failing to deliver goods after payment was received;
• Delivering goods late;
• Delivering goods in damaged condition;
• Delivering the wrong goods;
• Failing to surrender business property after the transfer of a business; or
• Violating confidential or private business information (such as a trade secret).
Although commercial liability insurance can cover lawsuits over professional errors, it might not cover breach of contract. Coverage varies from carrier to carrier. So, you’ll want to check with an insurance agent to confirm if a specific liability insurance policy can address this kind of lawsuit.
Discrimination and Wrongful Termination
Discrimination lawsuits can take many forms, but most often, they involve employees are who face discrimination on the basis of their:
• National origin
Federal laws prohibit these types of discrimination, so whether a worker was racially insulted or a supervisor behaves inappropriately toward an employee, these incidents are the business owner’s responsibility to mitigate and correct. Even if that happens, an employee can still sue for damages.
These federal discrimination lawsuits can extend to job applicants, too. For example, if a 50-year-old woman isn’t hired for a job, she could file a lawsuit claiming she was discriminated against because of her age and sex.
Many small businesses don’t have an HR department, which makes them especially vulnerable to these claims. Employment practices liability insurance offers protection by paying for legal costs associated with discrimination and wrongful termination lawsuits.
Commercial Property Insurance
Running a successful business is not without its risks. Most business owners are proud of the work they do and the property they utilize to get the work done. Unfortunately, nature is not always so understanding. Every year, business owners have their business property damaged or lost as a result of events completely beyond their control.
Commercial Property Insurance is for any business that has physical assets. Although your building or other business property may not be making money for your company, its loss could still be very costly.
This insurance type is all about insuring your building, the physical assets inside of that property, and many other types of physical objects owned and used by your business. Whether that property is small office furniture or a large warehouse, any property your business owns should be protected.
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