General Liability

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Pascal Burke

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    General liability insurance can protect a business from liabilities of many kinds. It gives protection from many unforeseen yet surprisingly common eventualities and false claims, saving a business from unnecessary financial loss. General liability insurance is usually the best policy to form a layer of protection for yourself and your business.

    General Liability insurance (CGL or GL) in its advanced form is usually Commercial General Liability Insurance or just General Liability Insurance. It consists of some basic coverages and may be tailored to fit the most of the company’s needs. The General Liability Insurance can financially save a company from claims that result from business operations, either carried out by you or your employees. These expenses are mostly linked to third-party accidents, property damage, data loss, bodily injuries, related costs and any accidents that can possibly occur on your property.

    For example, a bystander is hit by a shingle from a roof you are installing and severely hurt. They are going to need medical care and could sue your company. This is where your general liability insurance will kick in and cover those losses, so you don’t have to pay out of pocket. The commercial general liability insurance policy will kick in and help cover all the legal and medical bills you are charged with.

    How General Liability Insurance Works

    What happens when a general liability insurance policy is activated? It takes the financial liability away from your business and pays the costs that are incurred by the injured party, such as repairs to property or medical bills, all the while taking care of your legal expenses. Basically, general liability insurance keeps your business working in situations where your business could potentially be forced to close down and/or liquidate a substantial amount.

    A major example?

     An electrician is repairing a client’s circuits in the house. He does not secure the wiring as properly as it should have been, causing a short circuit and an electrical fire. The electrician’s general liability insurance policy will take care of the $10,000 bill of damages caused by the short circuit and the subsequent fire. The electrician will only have to pay the policy deductible from his own pocket, and thus, his business is safe.

    Had there been no general liability insurance policy, the electrician would have had to not only pay the entire $10,000, but also fulfil any legal fees in case of a lawsuit, out of his own pocket, thus setting his business far back.

     

    So basically, the general liability insurance policy will not only make your business safer from claims of injuries sustained by the third parties, but also cover the legal costs you might have through the course of your work. With an estimated 20 million civil lawsuits filed every year, there is a very high chance that you may need the General Liability Insurance Policy to protect your business from any serious financial damage.

     

    The Standard General Liability Insurance Policy Is Made of Several Parts.

     

    General Aggregate

    It’s the maximum amount of coverage a general liability insurance policy will pay over its specified period. Once the general aggregate amount is finished, the policy is no longer liable to provide any sort of coverage.

    Products & Completed Operations Aggregate

    This is the maximum amount of coverage that the general liability insurance policy will pay from a loss resulting from a product or service you have sold after the product or service has been delivered, put into use or completed.

    Personal & Advertising Injury

    One of the more misunderstood parts of the general liability insurance policy. This section provides coverage for losses resulting from things like libel, slander, and/or false arrest.

    Each Occurrence Limit

    This is the maximum payable due to any one occurrence on the general liability insurance policy. This may be smaller than the General Aggregate. So, you may have multiple losses that combined may reach the General Aggregate, but no single loss may go over each occurrence limit. It is possible to raise the Occurrence Limit and the General Aggregate with the purchase of an Excess Liability Policy or an Umbrella Insurance Policy.

    Damage to Rented Premises or Fire Damage Limit

    This is the easiest to explain because it only covers one very specific situation, fire damage to the space you rent. If you rent an office or warehouse or other type of space for your contracting business, this space is property in your care, custody or control which is not covered by the General Liability Insurance Policy as explained above. This part gives back some coverage for a loss by “fire only” that is due to your negligence. Clarification: If you or you employees cause fire damage to your customers property, this is coverage policy up to policy limits.

    Medical Payments

    This is a sub-limit (usually $5,000 or $10,000) of general liability insurance coverage for medical bills that result from your product, services or operation without the heavy burden of negligence having to be proven. Keep in mind that this would be solely for medical bills so any claims for additional compensation such as future loss of earnings or property damage would not be included in the Medical Payments sub-limit.

    Clarification: This is for a small injury, without having to prove that you or your employee was the negligence of the injury. Major injuries to 3rd party will be covered under part A of your general liability insurance policy up to policy limits. You and your employees are excluded from coverage from any part of the policy.

     

    What general liability insurance Shields You From?

    At the very core of it, general liability insurance protects you and your business from losses caused by the services, operations and employees that you and your business have. It can be divided into several scenarios/categories.

    •           Claims for bodily injury. A client or a third party getting hurt at your place of business or premises (Not yours or your employees).
    •           Medical payments. If a client or third party gets hurt at your premises, you will bear all of the medical costs (Not yours or your employees).
    •           Property damage. Caused by your employee, your business or yourself.
    •           Reputational harm. For malicious prosecution, slander, wrongful eviction, privacy violation and more such issues.
    •           Advertising errors. For copyright infringement and advertisement.

    Let’s look at all these in detail:

    Claims for Bodily Injury

    This usually involves any third party who incurred damages during the process of manufacturing, building, working, or even visiting your worksite, for work related or other purposes.

    Bodily injuries caused by a business are the most common type of liability your business may face, resulting in you having to pay for the claimant’s medical bills in the least. An injury claim could be something as trivial as a fall at your place of business causing a sprain, to something more serious like an injury from an accident on a construction site causing broken bones or even death.

    Example: A bystander is struck by a shingle that’s fallen from the roof of a home you’re repairing and breaks their arm

    The bodily injury or property damage must be caused by an occurrence. This is defined as an accident which includes continuous or repeated exposure to the same harmful conditions, and it must occur in the areas covered by the policy. Each coverage is subject to predetermined conditions though.

    Example: Suppose you put your equipment down on the sidewalk while you’re loading your van in the morning. A neighbour distracted on their phone doesn’t see it and falls over it, shattering their hand. They can sue you for their medical expenses.

    Medical Expenses

    Commercial general liability insurance policy helps pay for medical expenses and legal costs if an incident from your business leads to a lawsuit. Business general liability insurance can help cover costs related to these types of claims.

    Medical payments coverage is not the same as medical expenses coverage. All other coverages require a proof that you were indeed responsible for it or there was undeniably negligence on your behalf. Medical payments coverage does not require this; it pays out without assigning any faults to either of the parties involved. It provides coverage for harm to a third party at your business location or any other location where you or your employees are conducting activities related to your business.

    Another part of this; Compensatory damages, include expenses incurred by the claimant as a result of the injury, such as the cost of medical services and lost wages from missing work, as well as projected future losses and expenses.

    Example: A child wanders into your construction site to play hide and seek with their friends when they suddenly step on a nail. Even though your site is gated and you may not be at fault, that child can still get medical help immediately.

    Property Damage

    Is another common general liability insurance claim. When property is damaged due to negligence by you or your business, the owner can sue you.

    In the construction field, property damage is the most likely occurrence that you would file a claim for. While fixing up or building new homes you are constantly manipulating different parts of a building and sometimes an accident will occur that results in damage.

    Example: You installed a roof on a home and a month later rain starts spilling through a crack and damages the interior of the home.

    Reputational Harm and Advertising Errors

    It is also known as Personal injury or libel, slander, advertising injury, invasion of privacy, malicious prosecution, wrongful eviction, violating a person’s privacy, copyright infringement.

    Example: While speaking to a potential client, you make some inopportune comments about a competing electrical company. The competitor finds out and considers your comments to be slanderous and sues you. General liability insurance policy would be your safety net in this situation.

    General liability insurance is your shield against claims such as a wrongful arrest, defamation of character and wrongful eviction. This policy can also give coverage if your advertising efforts cause a financial loss.

     Example: In an SMS campaign to your complete mailing list, you use a copyright line to attract customers to use your HVAC services. Unfortunately, you accidentally plagiarised some content and they sue you over it. Once again, general liability insurance would help you financially get around the problem in a good way.

     

    Most small businesses have a presence online, and with each monumental leap in technology, social media and other online platforms are becoming a quick way of gaining attention — for better or for worse. Libel is a term used when you print fabrication about someone and slander is when you speak that falsehood to other people. Countless businesses, regardless of their size, have been subjected to lawsuits because of something apparently harmless; a joke, meme or an accusation pointed to another business. It would be grounds for a claim on your business or you.

    Copyright infringement claims come around when you use someone else’s work in your business ads or marketing, without buying proper rights to the content.

    Advertising injury happens when your advertisements might violate some other party’s copyrights by using their ideas for commercial purposes without permission/ this can be the reason for a lawsuit. However, General liability insurance will protect your business against any advertisement injury, including social media risks.

    Reputational harm may occur if you unwittingly said something in a news interview about a competitor that hurts their business.

    You can boost your safety net by adding on various riders and other insurance policies like auto insurance, professional liability etc, but the general liability insurance will be a base cover for everything.

     

    Other Factors Covered by the general liability insurance Policy: 

    Legal Fees

    General liability insurance policy covers a wide range of risks by paying for the costs of litigation as well as compensation for the injury. These costs can include court-awarded damages, settlements, and medical costs.

    Défense Costs

    Legal defence is the main expense associated with lawsuits. A general liability insurance policy provides coverage for legal counsel, which will be assigned and paid for by the insurer.

    The general liability insurance policy covers the cost of defending the insurance company or party against the charges that are named in the lawsuit. This can include attorney fees, costs for investigation, and other related legal expenses. This will save you and your company from liquidating any assets to pay thousands of dollars in legal defence fees.

    Judgments and Settlements Incurred as A Result of Litigation

    A General Liability Insurance Policy will cover your expenses should you need to go to court to defend an accident, an injury, or damage to property. Typically, your policy will pay for legal representation, litigation fees, out-of-court settlements, and judgments set by the court.

    The costs to the defence can be a huge amount even when the defence is not responsible for the damages. The indemnity, or payment of damages, and the defence obligations are the two parts of a General Liability Insurance Policy.

    Possible Loss of Income

    In case of being sued, your company could not only lose money, but also have its reputation damaged, which could cause you to potentially lose business and revenue, even if the lawsuit is ultimately unsuccessful. General liability insurance would pay, not only for all the court costs but also possible loss of income due to defamation.

    Non-Compensatory or General Damages

    This includes non-monetary losses experienced by the affected party, such as “pain and suffering” or “mental torment.”

    Liability of others assumed in specifically defined contracts

    Business disparagement

    Copyright infringement in your advertisement

    Damages Not Included in Your Policy

    While most general liability insurance policies provide coverage for compensatory and non-compensatory damages, punitive damages are typically not covered. Punitive damages are the additional money awarded as a penalty and sanction against the defendant as a form of punishment for its actions.

    Property damage claims to personal property of third parties damaged by your workers.

    Product liability is for when harm is caused by your “finished products.”

    Damage to property you are renting for your business.

    Advertising errors, libel, slander, reputational harm or bodily injury.

    Who Is Protected by General Liability?

     

    Business and Its Employees

    Usually, general liability insurance coverage is for the business and its employees when claims are made against them from an outside party that bodily injury or property damage was caused as a result of business operations. It protects against claims if business operations cause third party injury or damages.

     

    Why Do You Need General Liability?

    Well, the simplest answer to this question is because people like to sue for anything and everything they can.

    Moreover, the speed of technological development in today’s world and the concept of a shared economy with more and more businesses collaborating for projects, are two more things that have blurred the lines for liability. Trying to figure out the right type of coverage for your business can become quite a challenge.

    Following are some examples of when you might need coverage from liability of different kinds.

    Premises and Operations

    You are a store owner and a customer trip over a fixture, sustaining significant injuries. Medical bills are submitted to you for payment. General liability insurance policy will give you coverage for these charges, even if you are sued for negligence by the injured customer.

    Products and Completed Operations

    You are a contractor who built a deck for a patron. A year later, it turns out the deck was flawed and causes quite some damage to the house. You are sued by the patron for negligence and destruction of property. It goes to court and your customer wins. The General Liability Insurance Policy will not only cover the amount you are fined with, but also the legal costs you have had to pay.

    Employment Practices Liability (EPLI)

    Running a big business means having a lot of employees, this means a greater chance of being held liable for something anyone of them could have done, in which case you will need EPLI coverage. Employment Practices Liability insurance can help cover your business entity, directors, officers, and employees if you are accused of wrongful termination, harassment, discrimination, and other employment-related offenses.

    Contractual Liability

    It means that a company has taken on responsibilities that do not exist under normal law and has voluntarily taken on liability that is outlined in a contract specifically. This is a scenario which will help you rest assured that in case of a problem, you will not suffer from unnecessary financial loss.

    Independent Contractor Liability

    It is used to describe a person or company that hires an independent contractor to work on their behalf. This type of liability may be used by smaller companies that hire independent contractors for some of their jobs.

    Liability claims are very common and can get very expensive for any small business. Having a general liability insurance policy will help you protect your business from liability claims.

    • Business Owners. If you own a business, the sensible thing to do is to get business liability insurance or a full business owner’s policy. You’ve worked hard to get this far, and one accident or injury could cause financial setbacks for you.
    • Contractors. General liability insurance coverage is a great idea to keep you protected from your on-the-job risks.
    • Employees. In some cases, commercial general liability insurance is a requirement of employment before you can start.

    Businesses should investigate purchasing some type of general liability insurance coverage as soon as they are founded. Carrying general liability is usually a requirement for many large companies to award projects, signing contracts, and getting a lease for your business address.

    Mainly, having a general liability insurance policy assures companies and clients, who are interested in working with you, that your finances and work is secure. They want to work with an assurance that you will not go bankrupt due to a lawsuit filed against you, which could happen if you are not covered by a general liability insurance policy. If your business can be sued for anything under the excess of bodily injuries, property damages, marketing the wrong way or mishandling the client’s information due to any possible action by you or your employees, you should get general liability insurance coverage.

    Other reasons why small businesses need commercial general liability insurance include:

    Accreditation: If your business is certified or accredited by a professional organisation, that organisation may require you to keep your general liability insurance coverage current for licensure.

    Permitting: Many states or municipalities require proof of general liability insurance before providing your business permit or licence.

    Here are a few additional reasons why you may need a General Liability Insurance policy:

    •            General liability insurance thwarts the danger of you from paying out of pocket for damages and lawsuits that could potentially be destructive for your business.
    •           General liability insurance can provide protection from products that are faulty products that can cause injury or damage.
    •           General liability insurance can help you keep your business legal, as many states require proof of a commercial general liability insurance policy for certain types of businesses.
    •           General liability insurance proves to employees that you are serious about your business, letting you recruit and hire the best people in your industry.
    • General liability insurance can meet legal requirements in case you have to rent or lease a space for your business.

    A general liability insurance policy must be tailored to your needs. A good, independent insurance agent will give you endorsement options and exclusions before you purchase a general liability insurance policy. Nevertheless, it is important for you to have a general knowledge of your insurance beforehand. Some of the most common endorsements are:

    •           Open roof coverage
    •           Hot work coverage
    •           Uninsured Subcontractor
    •           Tool’s endorsement (Tool & Equipment Floater)
    •           Supplemental liability insurance
    •           Contractual Liability
    •           Prior Work

    You can modify your general liability insurance coverage by adding these and other endorsements based on the risks that your business encounters based on your trade.

     

     

    Cost of General Liability

    The cost of a general liability insurance policy can vary a lot depending on a variety of factors. You can even bundle up different policies together to protect your business better, as mentioned before. However, the general liability insurance policy itself can also fluctuate with its terms and conditions as well. In general, the main factors are:

    Claims history (Insurance claims history). History of previous claims can be one of the main and most decisive factors in determining the cost of your general liability insurance policy. The higher the number of claims against you and your company, the higher the cost of your safety net.

    Experience. The number of years you have been in business is another deciding factor in the cost of general liability insurance, since with more experience in your field the less likely you are to face a claim.

    Industry. Companies in higher risk industries pay a higher cost compared to lower risk businesses. For example, a roofing contractor is at higher risk than say a handyman. Also, businesses with greater risk factors, like personal injuries or property damage will have a higher premium.

    Location (Business location). A business located in a highly populated area with greater risk exposures will pay higher premiums. For example, the construction company will pay more if the project is located in a densely populated area, as compared to a project on the outskirts of the city. Therefore, rates vary based on the state where you conduct business.

    Policy limits and coverages. There are many limitations a general liability insurance policy can possibly have. The more things you include in your policy, the higher its cost will be. Secondly, the deductible amount you choose for your general liability insurance policy affects your premium. Therefore, if your deductible is higher, you pay a lower premium.

    Gross Receipts (Annual). This is by far the most common premium basis, based on the amount a business grosses in a year.

    Subcontractor Cost (Annual). This may reduce or increase the cost depending on the carrier.

    Payroll and size. It is the second most used to decide factor for a premium after Gross Receipts, it is used for services or construction industries where the biggest risk of claims depends on the quality and amount of work performed by an employee.

    Costs Will Fluctuate

    For a small business that needs one million dollars of coverage, the price, based upon the factors above.

    Each business is unique, so individual insurance policies from insurance companies need to be treated the same. No two businesses have the same general liability insurance policy. In addition, minimum premiums are involved. The insurance carriers establish certain minimum premiums just to cover the expenses of writing a policy.

    There are exceptions, of course. You have the final say in the amount of coverage you purchase. But insurance companies will make recommendations based on a number of factors. Some base the coverage on the size of your company’s assets, while others base the coverage amount on the size of lawsuits companies that are similar to yours have faced. 

    Is There a Legal Requirement for General Liability

    Federal law does not require you to have a commercial general liability insurance policy, but most cities and states do have their own insurance requirements for certain businesses, especially those who work in public. For example, if you are a general contractor who is applying for a license, most states will require you to provide proof of general liability insurance coverage before you can get a licence.

    And even in places it isn’t required by law, you could end up owing hundreds of thousands of dollars because someone tripped over the area rug in your waiting room and hit their head on your coffee table.

    Imagine hiring a company to do landscaping for your law firm. Halfway through, they get hit with a property damage claim from another business they worked with. If they don’t have business general liability insurance and cannot afford to handle the claim, they may be forced to shut down.

    So, you’re left with a half-finished landscaping job and the burden of hiring someone else.

    Policy Limitations or Exclusions of General Liability

    What You Need to Be Careful Of

    As important as knowing what your general liability insurance does cover, it is equally as important to know what it WON’T, so you are not taken by surprise in case such a situation arises. To understand that you have to know that no two General Liability Insurance policies are identical and that all policies contain omissions. What your policy excludes depends on your trade and operations within that trade.

    General Liability Insurance coverage is normally bundled with other coverages in order to create a thorough plan of protection. For example, although it typically does not compensate for punitive damages that are assessed for negligence or wilful misconduct, it is possible to purchase a Commercial Excess Liability Insurance to guard against claims of that nature. General Liability Insurance does not cover or replace Workers Compensation Insurance, Errors and Omissions Insurance or Directors and Officers Insurance (if your business requires that coverage).

    However, there are always basic exclusions in all insurance policies. Below is a list of common exclusions for general liability insurance:

    • Premise’s liability limits the coverage to a specific address or addresses that have been listed. Any address outside of those is not covered.
    • Operation limitation is the coverage of very specific operations, as suggested by the name. It applies especially if your business is considered highly hazardous. This needs to be reviewed carefully so you can amend or remove the endorsement as per need.
    • Contractor and subcontractor exclusions are becoming common in the construction industry. Other industries are beginning to exclude the work of contractors in their GL policies.
    • Pollution liability coverage is generally excluded from General Liability Insurance policies, but it can be purchased as an endorsement or as a separate policy.
    • Expected or intended injury, or bodily injury or property damage that’s intentional, is again not covered by General Liability Insurance policies. It doesn’t cover intentional damage done to your own product or property by you or one of the insured parties on your policy.
    • Contractual liabilities include additional liabilities you assume in a contract unless you would have been otherwise legally responsible for without the agreement.
    • First party damage is the bodily injury or property damage to yourself. It is not covered by General Liability Insurance policies, but can be purchased separately.
    • Damage to your product or work is not covered. General Liability Insurance policy only covers the work of others that your product or work is damaged.
    • Product recalls and associated costs are also not covered by General Liability Insurance policies.
    •  
    • Data breaches and most claims arising out of the handling of electronic data. For this, you have to get a separate cyber security policy. These are currently very cheap and easily available.
    • Employee injuries or illnesses resulting from their work are another phenomenon not covered. That’s covered by the workers’ compensation insurance, not by the general liability insurance. This will provide your employees benefits to help them recover from a work-related personal injury or illness. Its cost is dependent on your field of work and how hazardous it is.
    • Damage to your own business property is not covered by General Liability Insurance and you’ll need a commercial property policy to protect your self-owned or rented building and policies to protect the business equipment.
    • Automobile accidents caused by you or your employees while driving to and for work are not a part of this. You need a commercial auto policy for that, especially if driving is a regular part of your business.
    • Errors in professional services will be covered by professional liability coverage that will help cover your legal costs in case of a lawsuit you might face for an error in professional services provided by your business.
    • Claims of harassment or discrimination are increasingly important today but are not covered by the General Liability Insurance. An employment practices liability (EPL) policy will help guard you from possible employment-related lawsuits.
    • Claims over your policy limit are also not covered. A commercial excess policy, however, extends your general liability limits to help cover expensive claims.

    As you can see from all the above types of scenarios, General Liability Insurance policies include most of the coverage you will need, but they still exclude quite a lot. You need to be careful when reviewing your policy and must ALWAYS read the EXCLUSIONS, so you are not taken by surprise in case a situation arises where you were expecting to be covered but are actually not. Your business is counting on you to make the right decisions.

    Feel free to call and talk to one of our experts about General Liability Insurance and get a free, no-obligation quote tailored to your specific needs as a contractor.

    Coverage Limitations of General Liability

    General Liability Insurance limits vary, depending on a company’s needs as discussed above. Different industries have various exposures and require a specialised approach. It’s best to decide on General Liability limits with the guidance of an expert insurance professional.

    Like a traditional insurance plan, a General Liability Insurance Policy pays for covered claims up to a specified limit. The most common General Liability Insurance Policy is a $1,000,000/$2,000,000 policy.

    $1,000,000 per occurrence limit. This means the insurer will pay up to one million dollars to cover any one claim.

    $2,000,000 aggregate limit. During the effective dates of a policy (typically a year), the insurer will pay up to two million dollars to cover any number of claims.

    $1,000,000 per completed operations limit. This means the insurer will pay up to one million dollars to cover any one claim, for completed operations.

    Therefore, you need to be careful when you sign a policy, so you know if it is a per occurrence limit or an aggregate limit.

     

    Benefits of General Liability

    As stated in the above chapters, getting a General Liability Insurance Policy has its own benefits, which pay out in time. Here are a few benefits that come with a General Liability Insurance Policy:

    • Increases client contracts. Clients don’t want to be liable for your mistakes. Having a general liability insurance policy will guarantee higher safety standards for your business. It will also ensure the clients that you will not go bankrupt, mid-job. Therefore, this will encourage trust between the client and your business.
    • Demonstrates responsibility. In cases of accidents that occur on the job that didn’t happen due to the fault or negligence of the business, your business will be liable to pay for the damages. Therefore, having a commercial general liability insurance policy demonstrates that you have your client’s best interests in mind.
    • Establishes trust. Having General Liability Insurance implies that you are serious about the job and fully understand the risks associated with it. It reinforces trust and shows that you are not willing to risk your business’s future.
    • Covers expenses. Hiring an attorney and other legal defence fees, medical costs if someone was hurt, money owed for property damages, settlement or judgement payouts, non- monetary losses suffered by the injured party, compensatory damage, and punitive damages, expenses arising from claims pertaining to misleading or false advertisement, including slander, libel, and copyright infringement. Ultimately, this means you’re not stuck paying for everything on your own, or needing to file for bankruptcy and shutting down for good.
    • Peace of mind. General liability insurance coverage allows your employees and clients to focus on immediate matters because they know that the company is protected from the worst-case scenario. It also gives you a peace of mind that your business will not go bankrupt in a single night, helping you sleep better.
    • Comply with regulations. You are often legally required to have general liability insurance of some kind to cover key risks.

     

    Risks of not having General Liability Insurance

    What will happen if a business doesn’t have general liability insurance?

     Without General Liability Insurance, your business would be held liable for:

    • Damage to a customer’s or client’s property
    • Physical harm or bodily injury sustained by a customer or random person
    • Damage to the reputation of another party

     

     

    The cost of defending against these lawsuits can quickly add up, potentially to millions of dollars. Without a general liability policy in place, your business may be responsible for those costs. Especially if those bills are too large, they could be absolutely catastrophic for your business. Without the general liability insurance coverage, you’d have to pay for the damages, claims and lawsuits out of your own pocket.

    These types of liability claims are very common so you’ll need to keep your business protected. Paying for a claim on your own can be very expensive without a general liability insurance policy. These costs can range anywhere from a few hundred dollars to hundreds of thousands of dollars. Legal counsel can cost more than $100 an hour. Court costs may exceed $75,000 if the claim goes to court and you may need to spend several thousand dollars even if a lawsuit is dropped.

    So, it’s hard to imagine handling this as a small business.

     But that’s exactly what happens if you don’t have general liability insurance. If you’re like most small businesses, this is something you simply can’t afford. So, you run the risk of losing your business if you are found responsible for damages.

    If no one files a personal injury, third party bodily injury, advertising injury, or property damage claim against you, nothing will happen. However, if a third party does file a claim, it can be catastrophic, especially for small businesses with limited cash on hand.

    General liability insurance protects you from paying legal, defence costs, and medical fees on your own.

    To prove that you have insurance coverage, you’ll need a certificate of insurance. A certificate of insurance is an official document that lists all the coverage types and limits on an insurance policy. Once you get a certificate of insurance and share it with your client, you are ready to go to work.

     

     A little wisdom: the cheapest policy is rarely the best policy, what coverages are they leaving out to be so cheap?

     

    Guidelines Towards Decision to Get Insurance

    • Below are a few guidelines to take into consideration when deciding if General Liability Insurance is the right insurance for you:
    • Do you, your business or your employees:
    • Visit a client’s place of work or do clients visit your work site?
    • Routinely interact with outside parties?
    • Use a third-party location for any business-related activities?
    • Provide physical services to others?
    • Market a product or service for someone else?

     

    If you answered ‘Yes’ to any of these questions, General Liability Insurance is something that you must seriously think about getting. General Liability Insurance is about protecting you and your business from real or false claims made against you, and this is especially important when your business is at stake.

    Each business, just like the person who owns it, is unique. It has an individual personality and distinct needs. Therefore, each business must be insured especially and carefully according to its own needs and requirements. General liability insurance is almost a staple for each and every business, regardless of the size. However, general liability is just the basic beginning. Depending on your business, you might be able to have different types of insurance plans merged into one. For that, you need two things.

    Knowing what questions to ask

    Consulting a very good INDEPENDENT insurance broker, preferably that specialises in your type of business.

    What questions must you ask yourself before making insurance choices? Not difficult ones; just the right ones.

    The first thing you need to think about is the type of liability your business might face.

    To make sure you don’t miss anything, make sure you write down all the possible things that worry you and that might happen on the job. Things ranging from damages to the client’s properties, possible injuries to the client on your premises, trade specific damages.

    The second most important thing to assess are the factors that would affect the cost of your insurance. These can vary extensively. Some of the most common factors can be; the type of business industry, number of employees, previous claims, risk factor and the payment plan. This is the gist of factors that will affect the cost.

    Once all of these are in place, you need to figure out how much insurance to purchase. If you are a large business with hundreds of employees and customers, medical bills and lawsuit expenses can pile up. If you’re a small start-up, a single lawsuit, though less expensive, might be enough to destabilise you. Having the right general liability insurance policy in place will help you sleep better.

     

    Tips for Buying General Liability

    There are so many options when you want to insure your business against general liabilities that might come your way. The question is how to choose the option best suited to your needs and your money. Here are some tips to help you look for a general liability insurance policy that’s a perfect fit:

    Businesses may be able to reduce their general liability insurance policy cost by bundling most of their insurance in a Business Owner’s Policy (BOP).

    • However, there are a few things you can do to help keep general liability insurance premiums low. You can bundle insurance policies together, proactively manage and prevent accidents, and pay for an entire year upfront.
    • To help lower your general liability insurance premium cost, try choosing higher deductibles.
    • To understand why general liability insurance is worthwhile, you have to look at more than the costs. You have to consider the specifics of what general liability insurance is covering you against.

     When considering general liability insurance, consider the following:

     Identify your risks. Be sure to thoroughly analyse the operations of your business and identify potential risks. After that, choose all the coverages you need.

    Work with an independent agent. An independent agent will help you navigate the complexities of picking the right policy by assessing your needs and directing you to the broker that best serves your industry.

    Compare quotes. General liability insurance costs vary between insurers. Consider several quotes to find the best rates and coverage. When searching for insurance coverage it is good to work with a company that has the most options.

    At PBIBINS we provide you the best contractor insurance because we use multiple service providers to choose what is best for you

    Know Where to Look. Compare policies. A good broker will do this for you. Independent insurance brokers will send your application to multiple carriers to check coverage and price. Remember brokers are independent and will quote to many carriers. Must insurance agents be bound to one carrier and must quote them regardless of the price and coverage is best for you.

    PBIB, we specialise in Contractors Insurance, we can give you an impartial comparison with a strong background in the industry.

    Bundle Your Policy. You can save money by bundling your policies together. For example, a business owner’s policy includes general liability insurance and commercial property protection. It saves you money to buy one policy rather than two. Or, as in the case of multiple employees, you need worker’s compensation insurance, disability and unemployment insurance; when you bundle them together with a General Liability Insurance Policy, your cost can decrease.

    Don’t Overestimate Your Business Costs. There are two professionals you should be utterly honest with: your lawyer and your insurance broker. You must give a very accurate appraisal of your business while applying for insurance, so you don’t end up overpaying for your general liability insurance by quoting an inflated value.

    Pay Your Premium in Full. There are certain payment options that can decrease your overall cost. Like they say; a penny not spent is a penny saved. You’ll be offered discounts at paying yearly or by setting up automatic bank transfers. Your broker can give you detailed information on such offers.

    Manage Risks. It is a fact that the riskier your business is, the more your insurance will cost. You can take steps, though, to prevent it from blowing out of proportion. It may mean, at some point, you are just proving to your company that you are compliant with the safety guidelines and SOPs and even have invested in teaching employees about emergencies and safety protocols. Things like this will lower your premium considerably.

    When Cheaper Isn’t Better? Being a business owner, you realise well how there has to be a balance between cost and quality. Here are a few reasons why cheaper isn’t always necessarily better.

    A small or cheap insurance policy might not be what your business requires and may not completely cover you, leaving room for error and eventually loss on your part.

    If it is too good to be true, it probably is. There might be exclusions, so read the fine print!

    With the policy comes the expertise of the insurance agent who will help you through a lawsuit, if your business gets involved. Agencies who have a helpful track record must be considered for this. Not cheap ones.

    General liability has cost $20,000 per lawsuit on average in 2015, according to the Insurance Journal. If you can’t afford that, a policy at $400 per year should be essential.

    Determining Your Insurance Needs

    How Much General Liability Insurance Coverage Do You Need?

    Most small businesses prefer standard coverage amounts of $1 million per occurrence and a $2 million aggregate policy limit for their general liability insurance coverage. This type of policy will pay up to $1 million to cover a single general liability insurance claim with a $2 million limit over the life of the policy. This life varies by state law, usually up to 10 years.

    In case of a claim, your general liability insurance policy can cover the claim’s cost up to your coverage limits. However, you’ll need to pay a deductible first. A deductible is the amount you need to pay towards the claim before the insurance company starts paying. You get to select a deductible amount when you purchase general liability insurance.

    The cost of general liability insurance coverage varies based on the size of the business, your industry, your location and the amount of coverage that you need, as discussed above.

    You can handle general liability insurance costs by choosing the general liability insurance limits that best meet your needs. Your general liability insurance limit is the amount the insurance company will pay for a single claim or for all claims during the policy period. Choosing these limits wisely will help to lower your insurance costs.

    It is imperative to consider the extents and limits of coverage that your business might need so that your specific needs are met. Limits are what will protect your assets. You should discuss your general liability insurance policy in detail with your designated advisors, since your company has its own needs.

    Consideration must be given to the extent and limits of coverage a business might need to meet the comprehensive need of the organisation. Realistic limits protect assets of the insured and keep them from overpaying for a general liability insurance policy. How much general liability insurance you need should be discussed with your advisor, as every company is different. How broad or comprehensive the coverage needs to be can be judged in the analysis of how to protect your business.

     PBIB Insurance recommends the following limits of liability:

    • $1,000,000 per occurrence
    • $2,000,000 per aggregate
    • $1,000,000 completed operations

    Industries Covered

    Commercial, residential, and industrial structures

     

    Contractors Classes

    Class Description

    91150 Appliances and Accessories (Commercial)

    91155 Appliances and Accessories (Residential)

    91340 Carpentry, Framing Residential

    91341 Carpentry Interior, Wood Flooring

    91342 Carpentry NOC

    91343 Carpentry Woodworking (Shop Only)

    91405 Carpet, Rug, Furniture or Upholstery Cleaning

    91436 Ceiling or Wall Installation

    91481 Chimney Cleaning

    91523 Cleaning Outside Surfaces of Buildings (Pressure Washing)

    91551 Communication Equipment Installation

    91560 Concrete Construction (Foundations)

    91580 Executive supervisors

    91629 Debris Removal

    91746 Door, Window, Garage Doors, Assembled Millwork Installation (Metal)

    92215 Driveway, Sidewalk, Flatwork – paving or repaving

    92338 Dry Wall or Wallboard installation

    92478 Electrical Work (within Buildings)

    94007 Excavation NOC

    94276 Fence Erection Contractors

    94569 Floor Covering Installation (No ceramic, tile, stone, or Wood)

    95124 Furniture/Fixtures Installation (Commercial)

    13590 Glass Dealers and Glaziers

    95410 Grading of Land

    95625 Handyman

    96053 House Furnishings installation, Decorations

    95647 HVAC – Heating, Ventilating and Air Conditioning Systems

    96409 Insulation Work-Organic or Plastic

    96408 Insulation

    96816 Janitorial Services

    97047 Landscape Gardening

    97050 Lawn Care Services

    97447 Masonry

    97650 Metal Erection (Decorative)

    97653 Metal Erection (Non-Structural)

    97655 Metal Erection (Structural)

    98304 Painting Exterior

    98305 Painting Interior

    98344 Paperhanging

    98449 Plastering/Stucco

    98482 Plumbing (Commercial)

    98483 Plumbing (Residential)

    98636 Refrigeration, installation, servicing, or repair

    98677 Roofing (Commercial)

    98678 Roofing (Residential)

    98806 Septic Tank Systems

    98820 Sewer Mains (Referral Required)

    98967 Siding, Decking Installation

    98993 Sign Erection

    99505 Swimming Pool Servicing

    99506 Swimming Pool Installation (Above Ground)

    99507 Swimming Pools Installation (Below ground)

    99746 Tile, Stone, Marble, Mosaic (Interior Work)

    99777 Tree Trim & Removal

    99975 Window Cleaning

    99946 Water Mains

    99952 Waterproofing, Pressure Apparatus

    99969 Welding or Cutting

     

    Types of General Liability Insurance Policies.

    An Occurrence policy is the type of general liability insurance policy that would respond to claims when an accident or “occurrence” takes place. A common example is a slip and fall accident which occurred in a moment. It’s a little more complicated with product claim.

    Claims made is a much rarer type of general liability insurance policy, which would represent the claim being made instead of the occurrence. For example, the Occurrence happened a year ago, but the policy would allow claims to be filed even a year or more later. This is not very favourable for the person who needs the insurance. The two dates which matter the most in this type of insurance are:

    Retroactive date: the date when the general liability insurance policy starts working.

    Extended reporting period relates to the number of days, if the claim made is responded to after which, the general liability insurance policy will not cover it.

    The bottom line is that it is extremely important for you to be careful what you are signing when you buy a general liability insurance policy. You have to go through the whole general liability insurance contract very laboriously to be sure it is in your favour. If you believe you are short of time, or would not be able to decipher the points in detail, you can have a lawyer go through it. Pay a lawyer to vet your general liability insurance policy and make sure it is in your favour and it protects you properly and that you understand all the stipulations that go with it so you can make fully informed decisions.

     PBIB Insurance recommends only “Occurrence Policies”. Claims do not always become known within the terms of the policy, therefore “Claims Made” policies are to be avoided.

    Contents of a General Liability Insurance Policy

    Each Occurrence. The limit of the amount due for any one occurrence or accident. This is perhaps the most important limit under the policy.

    Products/Completed Operations Aggregate. The cap on the amount that the carrier will pay for multiple product-related claims arising during the policy period. Protects against covered lawsuits alleging bodily injury or property damage caused by an occurrence arising out of the sale of a defective product (products liability) or out of a completed operation (ex: construction of a building). Products And Completed Operations Coverage can only be triggered after the final sale of a product or construction job.

    General Aggregate. The cap on the amount that the carrier will pay for multiple premises and operations claims arising during the policy period.

    Personal and Advertising Injury. The amount payable for certain lawsuits, such as slander, libel, false imprisonment, invasion of privacy, and disparagement of a competitor’s product in your advertising materials.

    Damage to Premises Rented from Others. The amount payable when you negligently start a fire and damage premises that you rent under a lease agreement.

    Premises Medical Expense Payments. The amount that the insurance carrier will voluntarily pay on your behalf to get rid of nuisance incidents, such as slips and falls on your premises. However, if the injured party files a lawsuit, the Each Occurrence limit would be available.

    Premises and Operations. Protects against covered lawsuits alleging bodily injury or property damage caused by an occurrence arising from the premises or operations of the insured.

    Added Coverage

    Expanding Your General Liability Insurance Coverage

     

    All general liability insurance policies will have coverage limits and exclude certain types of claims. Therefore, you might need to both increase your general liability insurance coverage limits and buy further coverage for additional protection.

    One way to do so is by purchasing Excess Liability insurance. This coverage adds additional protection on top of the general liability insurance limits provided by your General Liability Insurance policy. Although your BOP might only pay a maximum of $1 million for a liability claim, your excess coverage might pay once a claim surpasses those limits. You’ll have additional protection even once your General Liability Insurance policy reaches its maximum general aggregate.

    PBIB Insurance. offers construction industry specific General Liability insurance coverages, paired with important value-added services that come with all policies, all applications are reviewed by a broker, all insureds speak with a licensed insurance broker prior to binding coverage, and timely certificates of insurance 5 days a week!

    Some General Liability Insurance Policy forms may include terms for component coverages such as “independent contractors,” “broad form property damage,” “and underground / collapse / explosion.” If needed ask your broker for these coverages as they may not be included

    Some Policies, other than general liability insurance to Consider for Your Business

    • workers compensation
    • commercial auto
    • tools and equipment
    • excess liability
    • surety and licence bonds
    • builders’ risk
    • installation floater
    • E&O
    • Business owners’ policy
    • Commercial Property

     Your agent can guide you through setting up the appropriate protection.

     Depending upon the nature of your business, you should consider adding the following policies:

    Excess Liability insurance 

    The excess liability provides additional limits above your General Liability Insurance policy for larger risks.

    Professional liability insurance

    Any mistake done by a professional at your company that causes financial loss to customers or clients is not covered by general liability insurance but by this coverage.

    What is covered under professional liability insurance? This type of business insurance is also known as malpractice E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.

    Types of professional liability insurance are:

    Technology and manufacturing E&O

    Contractors E&O

     Professional Liability coverage

     

    Employment practices liability insurance:

    If your employee files a lawsuit against your business, it is not covered by general liability insurance for small business. Therefore, your employment practices liability policy covers the risk.

    Disgruntled employees

    Risk: A disgruntled former employee—or even an applicant you didn’t hire—brings a legal action against your company to damage you and/or your company.

    Coverage: Employment Practices Liability can help cover your business entity, directors and employees if you are accused of wrongful termination, harassment, discrimination or other employment-related offenses.

    Contractual liability insurance:

    If you are unable to complete work that you are contractually obligated to finish, you may be liable for losses or a lawsuit. Your General Liability Insurance Policy will not cover your losses, but a contractual liability insurance policy will.

     

    Workers Compensation Insurance

    What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work- related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.

     

    Commercial Property Insurance

    What is covered under business property insurance? General liability policies don’t cover damages to your business property. That’s what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds, you need to replace them in the event of a disaster. General liability coverage can protect your tools and equipment.

    In some cases, GL can cover the cost of replacing or repairing your business tools and equipment if they’re lost or stolen. This is known as contents coverage, and it can usually be added to your commercial general liability insurance policy.

    Business Owners Policy (BOP)

    What is covered under a business owner’s policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.

    Commercial Auto Insurance

    What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business- only vehicles or a single company car. In some cases, it might cover your car or your employee’s car while they’re being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.

    Warning Personal Auto: Most personal auto policies exclude coverage on vehicles while they are being used for business. Commercial auto insurance will provide coverage for your business vehicles.

    Commercial Excess Policies

    What is covered under commercial excess insurance? This type of policy is to provide additional limits when required for larger exposures, in $1,000,000 increments.

    Surety Bond

    What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the oblige that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).

    Cyber liability & Data breaches

    Risk: You lose confidential business and customer data when your computer system is hacked.

    Coverage: Cyber liability and data breach can help provide you with legal and forensic assistance to attempt to recover stolen data, as well as ongoing data security consultation to help you manage cyber risks.

    Inland Marine / Installation floater

    Contractors operating with only general liability insurance do not have coverage for tools and equipment without an inland marine policy.

    Tools and Equipment Coverage, covers your tools when at the job or in storage or transit.

    Installation Floater covers your materials at the jobsite, in storage or in transit.

    Builders Risk, this insurance provides cover for the structure while under construction, prior to the certificate of occupancy, for fire, theft or other hazards.

     Contractor’s General Liability insurance

     It is for residential and commercial builders, general contractors, construction managers, design and build firms, specialty contractors or subcontractors, and owners of public and/or private construction projects. We offer contractor policies for every type of project:

    • Commercial General liability (General Liability Insurance)
    • Workers’ compensation
    • Commercial Auto
    • Excess Liability
    • Equipment Floater (Tools & Equipment)
    • Contractor bond
    • Builders Risk insurance
    • Installation Floater (Materials Coverage)
    • Commercial Property

     

    Why Pascal Burke Insurance Brokerage Inc?

     

    Easy. We’ve made it easier than ever before to complete the purchase and get general liability insurance coverage. How easy? We don’t even need to see equity ownership or financial statements from you. Just call today and talk to our experts on the general liability insurance you might need or fill the form above to get a free, no-obligation quote on your general liability insurance needs.

     

    Affordable. As a digital company, PBIB passes the savings for unnecessary administration on to you, providing you with the most competitive general liability insurance price you’ll find anywhere.

    Complete. Protect your business with the broadest general liability insurance coverage in the industry. You can tailor policies to your needs by choosing your own limit and deductible.

    Human. We provide you with expert support no matter your question: Reach us 24/7 via phone, email, or live chat. You even get a personal account manager to look after you and your insurance needs.

    Availability. PBIB Insurance general liability policies are available in all 50 states.

    Comprehensive Assessment. We take the time to fully understand your business and its unique needs, so we can recommend the right coverage to protect your business and employees.

    Objective Advice. Our licensed advisors are compensated based on service, not sales commissions. You can count on their impartial advice to select the right coverage. Just call today and talk to our experts on the general liability insurance you might need or fill the form above to get a free, no-obligation quote on your general liability insurance needs.

    Value. We compare shop to ensure you get the best price for the coverage you need.

     

    Extending your coverage. If a contract requires you to add individuals to your business liability policy, we make it easy to add them.

     

    FACTS ABOUT GENERAL LIABILITY INSURANCE

    • Protects your company from some of the fundamental risks that come with running a business. (Fact)
    • Does not cover automobile and professional liability.
    • General liability insurance is also known as commercial general liability insurance or contractor general liability insurance.
    • It is one of the most basic forms of business insurance.
    • General Liability Insurance coverage is the foundation of any insurance program and can sometimes be the only insurance a small business buys.
    • Business General Liability Insurance is often referred to as General Liability Insurance or Comprehensive Liability Coverage.
    • Almost every business has a need for general liability insurance.
    • Only covered claims of damage to a third party’s property and harm to a third party’s body or reputation.
    • When a valid claim is made, the insurer will pay up to the stated maximum. If the claim for damages is greater than the policy maximum, you as the policyholder are liable for the balance.
    • Help you protect your business, assets and future income.
    • When it comes to General Liability Insurance, “personal” injury differs from bodily injury in that personal injury refers to harm caused to a person’s or business’s reputation.
    • You may be accused of libel if a statement written by you damages another’s reputation. Similarly, slander involves speaking ill of another, culminating in harm to the reputation of another person or business.
    • Advertising injuries like copyright infringement resulting from your business’s ads.
    • Your General Liability Insurance policy would pay for the medical fees and costs incurred by the injured party, as well as the costs of your legal defence.
    • Your industry, policy limits, and location play a large role in what you can expect to pay for general liability insurance. The riskier your industry, the more you have to pay for coverage.
    • Bear in mind: liability claims against small businesses are very common and cost thousands of dollars, so getting general liability coverage is much less expensive than going without coverage.
    • Nearly 40% of small business owners will likely experience a general liability claim in the next decade.
    • Over 20% of all General liability claims involve burglary or theft.
    • Price of coverage varies a lot from industry to industry.
    • General Liability Insurance policies are the first line of defence for certain types of injuries or damages caused while conducting normal course business.
    • Often a General Liability Insurance policy is combined in what is known as a business owner’s package or “BOP”. In this type of package, typically there is additional coverage for property insurance not covered under the General Liability Insurance policy.
    • Those associated with your business don’t necessarily have to be employees, partners or customers to benefit from coverage, also include volunteers for liabilities that result from the work they do for you.
    • General liability insurance plans, particularly for small businesses, cover the cost of third-party lawsuits from minor accidents and property damage.
    • This insurance covers the people associated with your business, as well as other businesses.
    • As with most business decisions, the decision to purchase insurance (or not) comes down to cost. The good news is that general liability insurance does not have to be expensive. Just call today and talk to our experts on the general liability insurance you might need or fill the form above to get a free, no-obligation quote on your general liability insurance needs.
    • If you have business property, you might want to consider a Business Owners Policy instead.
    • Even if you’re not required to carry high coverage limits, remember: You don’t need to be a millionaire to get sued like one.

    This is a lot of information to take in, we are happy at PBIB Insurance to make it easy, we can take you application over the phone or you can go to our website at https://pbibins.com/quote/ and complete a simple questionnaire and we will get you squared away! Contact us now and feel free to talk to one of our experts about general liability insurance and get free advice and a free, no-obligation quote tailored to your specific needs as a contractor

    Pascal Burke Insurance Brokerage, Inc.

     

    2102 Business Center Drive, Ste 280

     

    Irvine, CA 92612

     

    Tel: 877-893-7629

     

    Email: info@pbibinc.com website: https://pbibins.com/

    Get a Quote: https://pbibins.com/quote/

     

    License: 0L98468 (We are licensed in over 40 state)

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