Small Business Liability Insurance Overview: A Quick Policy Guide for Beginners

Every business has its own needs, but you still want to make sure you’re covered by insurance, no matter how small your business is. In short, small business general liability insurance tends to cover things like members’ personal liability and consequences associated with third-party claims for property damage or injury. You can add additional medical injury items for yourself and damage to your property.

When you review CGL’s policies, you’ll see terms like “General Aggregate Limit.” This refers to advertising or personal injury, medical bills, and/or fire damage. “Operations coverage” means the basic coverage provided for property damage and bodily injury due to your or an employee’s negligence.

You may also see “Product Limit and Completed Operations” depending on your line of work. This coverage includes protection for those who make or sell a particular product, or are contractors who provide services. If damage occurs and your negligent product or service could be liable, you are obviously going to be facing a lawsuit. This is a separate type of aggregate limit and claims of its nature will not reduce the Overall Aggregate Limit, although it will still be subject to limits such as “Limit Per Occurrence” for each claim.

Small Business General Liability Insurance Limits and Claims

The “Limit per Incident” refers to the maximum amount that the policy will pay for a single loss derived from your Personal or Advertising Damages / Operations / Products and Completed Operations. Each of these claims will lower the aggregate limit separately.

Some other terms you’ll come across include personal and advertising injury, fire damage, medical payments, bodily injury, and third-party property damage, which are pretty self-explanatory.

Your industry will also play a role in the exact type of coverage you need. When looking for small business general liability insurance, see if there is any custom insurance available. Choose a company that specializes in businesses like yours and has coverage tailored to the risks that are prevalent in your particular field. Consider the risks you are likely to face that might not be covered by a GCL or Business Owner’s Policy (BOP) and include those risks in your coverage.

Another very important thing to take into account is the ability to respond to claims. Only get small business general liability insurance from a company that has many positive reviews, especially with regard to their claim response time. Claims should be easy and quick to process. One particular provider to start with is Hiscox Business Insurance. The rates are fair, the claims process is fast, and Hiscox offers free instant quotes on its website.