June 28, 2022

Types of injuries covered under Liability Insurance

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As a business owner, you face different challenges every day. From employees causing damage to a customer’s property during a service call to thunderstorms causing power issues with your store’s refrigerators, anything can go wrong.  

The most costly liability you face is causing injuries (or being accused of) to a third party, such as a customer or vendor. General liability insurance is your primary defense source against such claims and could impact your company’s ability to recover from such an event.   

What Injury Means

When shopping around for a general liability insurance quote, you will quickly realize that the term “injury” means harm differently depending on the claim situation.

Bodily Injury

This is much like it sounds. Injuries of this type occur to the body due to accidents and/or negligence. For example, if your customer were to trip on an extension cord in your store, which results in a sprained ankle or broken wrist. 

Property Damage

Damage caused to property belonging to third parties because of your employee, product, or similar situation would fall under this injury category. For instance, while trimming a tree on a client’s property, a heavy branch snaps off and causes damage to your customer’s roof. 

Personal Injury

Cases brought against you by a third party who suffered a physical or mental injury due to your negligence fall under this category. Also, these suits can involve claims of reputational harm caused by your business or the actions of your employees. 

The financial fallout from these incidents can devastate your company, potentially causing you to close permanently. However, a comprehensive general liability insurance policy can absorb these costs and provide the legal defense you need.

Perils Not Covered by a General Liability Policy

While a general liability policy covers many risks, not everything falls under its protective terms. Below is a brief overview of situations where you’ll need a different coverage:

For some, you’ll need different types of coverage to give your business more protection.

  • Work-related car accidents involving you and/or your employees
  • Employee work-related Injuries and/or illnesses 
  • Claims that exceed your policy limits
  • Damages to your commercial property
  • Errors and/or omissions made by professional services you offer
  • Purposeful wrongdoing and/or crimes committed by yourself or employees

Perils of Not Having Small Business Liability Coverage

Some business owners opt to save money by skipping this coverage with all of the protections that a general liability offers. However, this is short-sighted decision-making when you consider that most judgments and compensation settlements will easily exceed the cost of any premiums paid for these policies. 

Getting sued for property, bodily, or similar damages without any way to defend against it will mean the use of your personal assets to cover the expenses, which include:

  • Legal retainers and fees
  • Monetary judgments and court fees
  • Lost productivity time which hurts your revenue
  • Reputational harm to your brand
  • Possible closure of your operations temporarily or permanently

Instead of risking the possibility of these devastating consequences, protect your dedication and hard work with a general liability insurance policy as soon as you open your business. 

Which Businesses Need General Liability Protection?

Generally, general liability insurance isn’t a state-mandated requirement. Despite this fact, all businesses should carry a policy for several reasons, including:

  • Companies and customers you work for may require it as part of a contract
  • You have a publicly accessible building, job site, or store
  • Your employees perform work on or near a property you don’t own
  • You market your services and/or products 
  • You and/or your employees represent your company on social media personally and/or professionally

You may have realized that these seem like everyday activities a company would engage in, which is true. However, they also come with significant risks that could potentially harm those you do business with.

Consider More than General Liability

Because general liability policies don’t cover everything that can go wrong, make sure to fill in coverage gaps where your company would be most vulnerable. Below are some additional coverages you may want to consider as part of a larger umbrella of protection: 

Tools & Equipment

Whether you install flooring or landscape million-dollar properties, you can’t make a living without your equipment. But, what happens if these assets are stolen from a work vehicle or damaged in a car accident? This coverage can replace these expensive tools and save your budget.

E&O

Errors and omissions (E&O) coverage, also called professional liability insurance, covers damages you might cause as a professional services provider. For example, accountants, hairdressers, and other skill-based careers rely on these policies to absorb the cost of mistakes they might make, which financially harms their clients. This includes covering the costs of legal defense even in claims involving negligence on your part.

Workers’ Compensation

This coverage is mandatory in most states if you employ a certain amount of people in your company. Workers’ compensation is invaluable because it protects both you and your staff should they get hurt or sick while on the job. In addition, it pays for related medical care, lost wages, and additional benefits depending on your employee’s injuries. 

Commercial Auto 

Many state governments require businesses to carry commercial-grade auto insurance if company vehicles are used to conduct business. This coverage provides a higher level of protection than personal policies, which often won’t cover business-related accidents. 

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