This policy will also include a limit, which is the maximum amount they will pay in the case of a liability claim. It’s critical to correctly assess your risk to ensure you have sufficient coverage and won’t have to reimburse expenses out of pocket.
The typical limits for General Liability insurance are $1 million per occurrence and $2 million overall; if more coverage is required, the limitations are generally doubled. If you want coverage in excess of $2 million per event, you’ll almost certainly need to purchase an umbrella or excess liability insurance.
For example, if your small business is sued for $300,000 in medical expenses resulting from a slip-and-fall accident but your insurance coverage is only $250,000, you will be held liable for the difference of $50,000. Prior to purchasing a policy, it’s critical to conduct industry research.
Additionally…
Commercial general liability insurance protects a company against third-party lawsuits for physical harm, property damage, and personal/advertising injury. It’s worth noting that if you have a client’s belongings in your hands as part of your service, cleaning, repairing, or storing (for example, a dry cleaner or an appliance repair store), you are legally required to have general liability insurance. If you are an architect, it’s not only a good idea to have this coverage, but also Errors and Omissions (E&O) insurance. This type of policy covers you if an unhappy customer sues for financial damages due to mistakes made on your part while performing your services.
This insurance also protects your employees and other businesses too. If you have a collaboration or joint venture with another individual, all of your partners and members, as well as their spouses, are protected if they are sued for anything they do while working for you.
What Is NOT Covered by General Liability?
Negligence
If you or your firm is sued for professional negligence, general liability insurance does not protect either of you. Professional Liability Insurance is a distinct coverage that must be purchased.
Commercial Real Estate
Commercial Property insurance is required in addition to General Liability coverage. Commercial Property insurance protects you against property damage caused by you or your business. You may get a Business Owners Policy (BOP) that combines both General Liability and Commercial Property coverage.
Damage to property belonging to a client while it is in your possession
Customer goods are not covered if you work on, clean, repair, or store them (for example, a dry cleaner, storage facility, or appliance repair company).