What Is General Liability Insurance for Business?

Known by many as the business liability insurance, a general liability insurance is a type of policy that businesses in most states are required to purchase by the law and that protects the insured business from general claims made by third parties for various types of damage or injury sustained by third parties or their properties that occur because of the insured business’ activity. In other words, a general liability insurance Colorado policy provides coverage for medical and repair expenses resulting from the activities of the insured business as well as for the related attorney fees and other related costs.

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Examples of What a General Liability Insurance Covers For

The most common example is slip and fall accidents. If a client or customer of the insured business sustains a physical injury because of a wet or slippery floor on your business premises, your general liability insurance might be used for covering the claim made by the injured client.

Another category of claims covered for by general liability insurance policies is for damage sustained by the property of your client. For example, if your painting team accidentally spills a bucket of paint on the client’s floor and the client makes a claim, the expenses related to the restoration or cleaning of the floor can be covered from the general liability insurance. You can also use your general liability insurance if your business premises are in a rented property and your activities cause any damage to the landlord’s building.

Examples of What a General Liability Insurance Policy Does Not Cover For

In most states, businesses are required by the law to purchase insurance policies that cover for very distinct categories of claims. The range of these policies includes workers’ compensation insurance, a type of policy that covers for the work-related injuries sustained by your personnel, commercial auto insurance policies that cover for the damage sustained by your commercial vehicles and cars used for the purposes of your business and commercial property insurance that covers for damage sustained by the building and the property from which or in which you conduct your business. The scope of your business liability insurance cannot be extended to include coverage for these claims, which also means that you will need multiple, separate policies.

How to Purchase a General Liability Insurance for Your Business

You can either turn directly to an insurance company or you can turn to an insurance broker or agent to make a selection of suitable policies for you and to present the pros and cons of each of your options for you. If you decide to handle the insurance purchasing process on your own, check the offers of all the insurers available in your area – there can be significant differences in terms of the premiums charged. It is also a good idea to check the company’s reputation in terms of how they handle claims. If you decide to turn to a broker instead, try to find a specialist that has been in the business for long and has extensive knowledge about the benefits and disadvantages of the products offered by multiple insurers.