By Porter Brandenburg
You already know that you need insurance coverage for your business. But how much do you understand about the general liability process? How do you know what it covers, the different types of risk, and how your industry plays a factor? Here are four tips to keep in mind when purchasing general liability insurance.
Tip #1: Know What’s Common for Your Industry
Different industries require unique levels of coverage. What might be appropriate for a clothing boutique may not be enough for a general contractor. Likewise, a consultant who works from home probably doesn’t need anything close to the same level as an industrial machine shop.
In these cases, you'll need to adjust your liability insurance as necessary. Make sure it includes coverage for risks specific to your industry. Talk with your agent about what is common for your industry and make decisions based on his or her recommendations.
Tip #2: Understand Both Physical and Intellectual Risks
Did you know that not all liability claims come from physical harm? General liability insurance also often protects against intellectual risks, such as copyright infringement and reputation damage. These are often referred to as personal injuries in a policy. Understanding the difference and applying that knowledge to your specific business is important when purchasing a policy.
Tip #3: Find Out What Your Policy Covers
Most general liability insurers offer similar types of coverage. However, it is very important to find out what your policy covers in the event of a future claim. Common examples include legal costs, medical bills, and settlement costs associated with bodily injury to others and/or property damage. If you have any particular concerns, ask your agent whether you can extend protection.
Tip #4: Make Efforts to Reduce Your Risk
While having a general liability insurance policy is important, you still need to attempt to reduce your risk in any manner possible. This includes:
Stowing away tripping hazards
Marking exits clearly
Providing detailed product information to your customers.
Properly training employees to spot instances of danger.
Promoting a strong safety culture within the workplace.
Refraining from making slanderous comments about others—both verbally and the internet, including on social media.
While these are just a few of the different aspects of purchasing general liability insurance, the process really begins by sitting down and meeting with your local agent.
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