It is essential that you know your liability coverage and how it works for your business.
As a business owner, you need to be keenly aware that a minor incident could result in a big legal problem. Today, a spilled cup of coffee or an implied injury from your product can result in a lawsuit. General liability insurance, property insurance, and worker’s compensation insurance are a must to be in business. Your liability insurance will protect the assets of your business in the event it is sued for something it was perceived (right or wrong) to have done to injure or cause damage.
General liability insurance covers legal fees and damages in a covered claim and/or lawsuit. Bodily injury, property damage, personal injury, and general damages are normally covered in this policy. Punitive damages are usually not covered as they are awarded when it is determined the act was intentional.
In addition, your policy will spell out maximum coverage and limits during the policy period. It may make sense to purchase a commercial umbrella policy to cover additional risk. Review the limits and work with your commercial agent to determine what is best for your business. You can also check with your state department of insurance to check for past cases and outcomes in helping to determine your company’s coverage limits.
General liability coverage can be purchased as part of a business owner’s policy or separately. A business owner’s policy will package the liability with the property insurance. Normally, when part of a business owner’s policy, the liability limits are fairly low. You should review and assess risk with your commercial insurance agent. Things to keep in mind are your perceived risk, like operating a lot of heavy machinery or have a fleet of vehicles on the road than say a signage business.