7 Reasons Your Chicago Business Needs General Liability Insurance
Reasons Your Business Needs General Liability Insurance
You’re looking at insurance plans for your business and wondering if general liability insurance is really necessary. It is. Here are 7 reasons why.
Business owners know they need general liability insurance as a basic safety net. Figuring out what kind of insurance you need gets a little trickier.
After all, you need property insurance, but what about professional liability insurance? Workers compensation insurance is a must if you want employees, but what about business interruption insurance?
Then there is the king of all insurance questions. Do I really need general liability insurance if I already bought these other insurance policies?
The answer to that question is always yes. Let’s dig into the reasons why.
1. General Liability Insurance Protects Employees
It seems like news reports of corporate misbehavior show up almost every week. Yet, most business owners feel a responsibility toward their employees. They are well aware that if something goes wrong, they’ll be putting other people out of work.
General liability insurance acts as one line of defense against a mistake or accident sinking the entire business. For example, if a mistake on the business property damages someone’s car, it’ll probably end with an insurance claim.
The business won’t go broke and no one will end up jobless.
2. Gets You Additional Support During a Lawsuit
No business wants a lawsuit. They soak up a lot of time and they’re expensive. The median cost for a liability suit that goes to trial is over $50,000.
Unfortunately, you can’t always avoid them.
Say one of your employees expresses a derogatory opinion of your main competitor while in earshot of customers. Word gets back to your competitor about it.
The next thing you know, your business is on the receiving of a personal injury lawsuit. Why? Your employee slandered your competitor.
As a business owner, there isn’t much you can do to dodge a bullet like that. Employees will talk and banning topics of discussion rarely works.
Once the lawsuit starts, your general liability insurance provider steps in. They help cover legal expenses, try to negotiate a settlement, and pay out for any settlement or judgment.
3. It Helps Protect You from the Inexplicable
There is no perfect safety plan. No matter how diligent you are about property maintenance, sometimes things just break.
If you’re very lucky, the only thing that gets damaged is your own property. If you aren’t lucky, customer property gets damaged or customers get injured.
Say that a pipe breaks in a bathroom. Even if your employees go in to clean every hour, that’s a big time window for spreading water. It only takes one customer walking in unawares before there’s an ambulance on site.
Assuming there are no warning signs of a weak pipe, there’s no way to predict something like that. Even so, a customer got hurt and some kind of legal action will follow. That brand of an inexplicable accident is exactly the kind of thing general liability insurance covers.
4. Prevent Lawsuits
Take the person who slipped and fell after your inexplicable pipe breakage. If you let it ride, they might sue you. If you alert your insurance company immediately, things can go another route.
The insurance company can get proactive and offer medical payment coverage. Given the high cost of medical care, those payments can derail a potential lawsuit all by themselves.
Alternatively, the insurance company can offer a lump sum settlement right then. If the person who slipped accepts the settlement, it typically comes with an agreement that they can’t sue later.
These approaches are often preferred as a way to avoid the high costs of a court case.
5. Ill-Conceived Marketing
Marketing is one area where it’s easy to make mistakes on accident. Let’s say you spent a month dreaming up the perfect slogan for your business. In your excitement, you rushed the slogan into your advertising.
It turns out that some other company uses that slogan and has for 20 years. You didn’t mean to do it, but you still stepped on another company’s intellectual property.
Most companies will issue a basic cease and desist letter, at first. It’s a polite way to say, “Knock it off before we get serious about this.” Such letters aren’t obligatory.
The other company can seek damages for you infringing on their intellectual property. General liability insurance will help you cover those costs if it comes down to it.
As a general rule, though, always do some basic research before dropping a new slogan into your marketing mix.
6. Tenant Liability
Do you rent your office or building? That means you’re probably on the hook for any damages done to the property while you occupy it.
Let’s say your secretary, Betty, is turning 65. The rest of the employees pitch in for a giant cake and put 65 candles on it. When Betty blows out all the candles with help from Bob, the triathlete from accounting, the sprinklers go off.
The water from the sprinklers damages the carpeting and some of the paint. There was no malicious intent from anyone involved, but there’s still damage to deal with. Your general liability insurance should help defray the cost of repairs.
7. Peace of Mind
Running your own business comes with lots of unavoidable stressors.
Sometimes you worry about meeting payroll. Other times you worry about hiring enough people to meet your current workload. Other times you stress about whether you sent your accountant all the right paperwork before quarterly taxes are due.
Getting insurance lets you set aside some of the concerns about the unknown. Yes, a customer might get hurt on your property, but it won’t kill the business if it happens.
Some kinds of insurance are optional if recommended. Business continuation insurance and professional liability insurance are godsends if need them. General liability insurance isn’t in that category.
General liability insurance covers you from so many possible pitfalls you can’t get by without it. Whether a customer’s car gets totaled, you make a marketing mistake, or Betty’s birthday party turns into a man-made monsoon, general liability is your go-to solution.
Insured ASAP Insurance Agency specializes in commercial insurance. If you’re launching a business and need general liability insurance, get a quote from us first.
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