Does your small business need general liability insurance?

Even if these don’t apply to you, small businesses that work directly with clients and customers usually benefit from commercial general liability insurance, also known as a CGL policy. This insurance policy can keep your company financially stable if you’re sued by a customer or competitor. Because general liability insurance provides important coverage, most small business owners buy the policy right after they start their business.

What does commercial general liability insurance cover? General liability insurance provides coverage for common liability claims from third parties (people outside your business).Commercial general liability insurance covers legal defense costs if someone sues over a bodily injury, property damage, or advertising injury. Your CGL policy can pay for everything from hiring a lawyer to court-ordered judgments and settlements.

 General liability coverage is essential if your business:

Is general liability insurance required by law? Generally not, but states may mandate it for certain industries like construction. While general liability insurance isn’t typically required by law, it’s still likely required by your landlord, mortgage company, or clients. A landlord or client may ask your business to show a certificate of insurance as proof of your general liability insurance coverage. This document verifies that your business can handle any personal injury or property damage lawsuits. And more importantly, the certificate gives your property manager, bank, or customer peace of mind that they won’t be stuck paying the costs of a lawsuit against your company.