What Is Covered for Commercial Liability Insurance? What Is Optional?
Some might think that a small service company is less likely to face a lawsuit than a larger company or manufacturing plant. The fact is, in the complex and constantly changing business climate we have today, any business – whether large or small, office-based or dependent on manual labor – is vulnerable to a variety of lawsuits against it.
A typical Commercial Liability Insurance policy (usually referred to as General Liability Insurance, or GLI) covers claims of third-party bodily injury, third-party property damage or loss, personal injury such as slander, advertising injury, and a few other areas. This type of insurance is often fairly inexpensive, especially if you consider that the costs of defending a liability lawsuit without it are certainly not. If your company doesn't have adequate GLI and faces a claim that it would cover, you'll probably end up footing the bill. And if you're anything like most businesses, those hefty bills would be cripplingly expensive if you don't have insurance to cover them.
Commercial Liability Insurance is critical for businesses such as financial planners, medical offices, architects, engineers, and numerous other fields. All too often, though, business owners skimp on their General Liability Insurance in order to reduce day-to-day expenses. This might save a little cash up front, but in the event of a lawsuit, the company will find itself extremely vulnerable, and most likely out of a lot of money – especially if they lose the case and have to pay damages.
Owners of small businesses can use several strategies proactively to reduce their premiums without skimping on coverage:
- Shop around. GLI coverage and cost vary by company, so read up on what is included and what isn't with different companies to get a sense of what's available at different price points. Take advantage of free quotes to help you compare rates
- Think about a BOP. A Business Owners' Policy combines your General Liability coverage with Property Insurance, and in most cases this will help you save on both
- Talk to a specialist broker. If your business is in a niche or faces high risk, you need specialized insurance to keep up with your unique risks. Enlist a true small-business insurance expert to help you get covered adequately and at a rate you can afford
You can also purchase optional coverages specific to your industry to complement your Commercial Liability Insurance for office-based businesses, such as:
- Directors and Officers (D&O) Insurance, which protects your leadership from lawsuits alleging negligent professional conduct in their role as a director or an officer
- Errors and Omissions (E&O, or Professional Liability Insurance), which protects your company from lawsuits alleging an error or omission in professional work, such as a consultant recommendation gone awry or similar mishap
- Excess Liability Insurance (also known as an Umbrella policy), which picks up the slack if a lawsuit's associated expenses exceed the coverage limits of certain of your other policies
These and other types of optional coverage give you an extra safety net for unique risks you may face in your particular line of work. However, Commercial Liability Insurance in the form of General Liability coverage is a good place to start. Talk to a dedicated insurance agent to discuss your particular risks and exposures and get your business protected.