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General Liability Insurance

Daniel and Henry Building-300x235This page will help educate business owners on General Liability insurance. If your business is located in St. Louis MO, and you would like to speak with a Commercial Insurance Broker, please contact Lucas Signorelli to schedule a consultation.

What is General Liability insurance?

General Liability is the foundation of commercial insurance, and is likely the first policy a small business will need to purchase. It provides basic protection in case of lawsuits against your company. While it is not required by state law, it is often required by contracts your business enters into, such as leases or subcontracting agreements.

This page will help you better understand:

  • What General Liability covers
  • What General Liability doesn’t cover
  • How much does Business Liability insurance cost?
  • How to shop for a General Liability policy
  • Benefits of working with an Insurance Broker

What does General Liability insurance cover?

True to its name, a General Liability policy provides legal defense when your business is held liable for causing damages to someone else. It’s primary purpose is to cover two very specific things:

    • Bodily Injury
    • Property Damage<

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If your business is held responsible for injuring someone, or damaging someone else’s property, your General Liability policy will pay for claim settlement and associated legal expenses.

Amount of Coverage: A typical policy will provide your business $1,000,000 per incident, and $2,000,000 per year worth of coverage.

Coverage can kick in when damages are caused by the following:

      1. Premises – Someone is injured on your Business’s property (a customer slips and falls at your storefront or office).
      2. Operations – Damages occur as a result of your business conducting its normal operations (someone hit with a rock while landscaper is mowing grass)
      3. Completed Operations – Covers past work that has been completed (A plumber installed pipes that burst and flood the customer’s home 6 months later)
      4. Product Liability – Your physical product injures someone (someone ingests your product and gets sick, or your product malfunctions causing property damage)

Furthermore, a General Liability policy also provides coverage for:

      • Personal and Advertising Injury – This section of the policy provides protection (typically $1,000,000) if your business is accused:
        • False advertising
        • Slander
        • Malicious Prosecution
        • False Arrest
        • Copyright infringement
        • Wrongful Eviction
      • Medical Payments
        • The policy will make payment to someone injured on your property, or as a result of your business operations. Regardless of fault.
        • This financially compensates an injured person in hopes they will not file a larger law suit.

What does General Liability insurance not cover?

As you can see, the General Liability policy covers a lot of business exposures. Equally important, however, is what it does not cover. The situations below are either best addressed by purchasing another type of policy, or can not be covered by insurance.

  • Crime or Intentional Acts – Insurance doesn’t cover criminal acts.
  • Liquor Liability – Covered by separate Liquor policy.
  • Injuries to Employees – Covered by workers Compensation
  • Pollution – Covered by separate policy.
  • Vehicles, Airplanes, Boats – Insured separately.
  • Damage to your Property – General Liability only covers damage to other peoples property. Damage to your own stuff is handled by a Commercial Property policy.
  • Faulty Workmanship – You’ll need Errors and Omissions for this.
  • Product Recall – Handled by a separate policy.
  • Loss of Electronic Data – Can be best handled by Cyber Liability or other types of policies.
  • War

How much does General Liability insurance cost?

Pricing is based on two factors:

  • What type of business are you in? – Insurance companies assign your business a rate based on your industry, and the level of risk associated. For example a Bakery is cheaper to insure than a fireworks factory, since baking cookies is far less dangerous than manufacturing explosives.
  • How big is your business? – The larger the business, the more expensive your general liability insurance. This makes sense, since bigger companies have more exposure. The “size” of your business is measured by your annual revenues.

In conclusion, your policy will be priced on the following formula:

Annual Revenues x Rate associated with your industry

General Liability Insurance ConsultationHow to shop for General Liability

As a business owner, your objective should be to get the most insurance possible at the best price. When we say “most insurance possible”, we’re talking about the policy limits – how much the insurance company will pay on your behalf. This is typically $1,000,000 per incident, and $2,000,000 per year. You’ll need to find the insurance company that offers the best rates in your state for your class of business.

You’ll need to decide if you want to DIY, or work with an insurance professional.

DIY: If you’re going the DIY route, you’ll want to search for and purchase a policy online. There are many websites that make buying General Liability policies very easy. However, this typically only works for standard, straightforward, and (generally) smaller businesses. If your business is large, complex or not easily classified, many of the online providers will not be able to insure you.

  • Advantages
    • Can be faster
    • Can be less expensive
    • Easier to use technology
  • Disadvantages
    • Often not a viable option for larger, more complex businesses
    • Often not an option for risky businesses, or those that are hard to classify.
    • No agent or insurance professional to consult you
    • Calling into 1-800 numbers to service your account

Below are a few sites to try:

Working with an Agent or Broker: If you’d like to work with an insurance professional, start by doing research in your local community. Ask around, look on Google, and locate someone with a good reputation that you want to work with. There are two basic types of Agents:

  • Captive Agents: Represent one company.
  • Independent Agents/Brokers: Independent and represent many carriers.

The most important thing is finding a competent professional who provides you sound advice, responsive service, good insurance products, and affordable pricing. You’ll know it when you find it.

Insurance PresentationWhy Work with an Insurance Broker

Having a qualified insurance professional working with your business is just as important as having a lawyer, or accountant. An insurance professional will help you evaluate the risk profile of your business, and protect you by putting proper policies into place.

Our firm operates as an independent insurance agency. We believe in this model because it allows us to remain independent of one insurance company, and therefore choose the carriers and solutions that best fit the wide ranging needs of different clients. Below is a list of specific services that you can expect from a qualified Broker:

  • Risk Analysis
  • Policy selection
  • Managing relationships with insurance companies
  • Shopping the market for best possible pricing
  • Claims Management

Working with a broker to manage your General Liability policy often does not cost any additional money. Brokers are paid commission by insurance companies on the back end, so there is typically no “fee” associated with the services of a commercial insurance broker.

Working with Lucas and Daniel and Henry

If you’re in the market for a Broker, feel free to contact Lucas Signorelli at Daniel and Henry. Lucas helps businesses in St. Louis MO and beyond, manage their commercial insurance programs. We have been serving this community since 1921, and have many of the most qualified insurance professionals in our region. If you’re ready to work with a local, independent, professional insurance broker, contact Lucas today and schedule an appointment.

Click Here to contact Lucas to schedule a consultation.

Lucas Signorelli Insurance Broker

Signorelli Insurance offers free, comparative quotes on General Liability Insurance from multiple insurance carriers so you can get the best possible rate.

Want to see how much we can save you? Just request a quote to find out.