General liability (GL) insurance can protect your business against a broad array of risks. However, there are many myths about General Liability policies that can leave you exposed to costly liability lawsuits and claims. This article explains some of the most common misconceptions about General Liability insurance coverage.
1. Having a Business Owner Policy (BOP) is Enough
A BOP offers property and liability protection in a single package, but it may not be enough, depending on your industry. As most BOP policies offer little General Liability protection, you may need to expand your coverage with options like an umbrella insurance plan.
2. General Liability Insurance Covers All Risks
Having a General Liability policy does not mean that you have all potential liabilities addressed. Typically, commercial General Liability insurance may cover the following third-party losses:
● Bodily injury (such as in a slip, trip, and fall accident) for which your business is liable
● Property damage caused by your company
● Reputational harm
3. Small Businesses Don’t Have Insurable Risks
A competitor could sue you for reputational injury or copyright infringement regardless of your business size. A customer injured on your premises may also file a claim against you. Your business faces plenty of liability risks no matter the size of the company.
4. Home-Based Businesses Don’t Need General Liability Insurance
Homeowners insurance policies do not usually cover bodily injury or property damage that home-based enterprises may cause. A separate General Liability policy can help pay for medical bills, repair, and lawsuits arising from such liabilities.
5. You Don’t Need Professional Liability Insurance with a General Liability Policy
A General Liability policy does not cover you against liabilities such as errors and omissions that result in financial harm to a customer. If you’re in the service industry, such as healthcare, real estate, or consultancy, you need professional liability insurance to cover the more abstract perils.
6. A General Liability Policy Covers Your Employees
Commercial General Liability insurance does not cover employment disputes, and it won’t help with worker’s compensation claims. You will need to take out a worker’s compensation policy to cover your employees for on-the-job injuries, fatalities, or illnesses.
7. Your Business Property is Covered Against Damage
General Liability insurance covers third-party property damage for which your business is responsible. It doesn’t cover damage to your owned or rented business space and equipment. For this protection, you’ll need to take out commercial property insurance.
8. General Liability Includes Liability Coverage for Business Vehicles
If any of your company vehicles are involved in an at-fault accident, you will be liable for any injury or property damage incurred by the other driver. General Liability doesn’t cover commercial auto liability cases. You will need to get a commercial auto insurance plan for that.
It’s crucial to beware of these 8 common business insurance myths to avoid underinsuring your company. When it comes to General Liability insurance, it’s also important to consider any applicable limits and exclusions. To learn more about securing your small business with a General Liability policy, contact the experts at J. Archer Insurance Group today. We’ll answer all your questions and guide you through the steps for obtaining ideal business insurance coverage.