If you own a business, you need to know these facts about general liability insurance. General liability insurance can be of help when your suppliers or customers sue you for business-related matters such as defective goods, or if they are injured at your place of business or by one of your employees. Here are five facts about general liability insurance that all business owners need to know:
1. The General liability insurance only pays for lawsuits filed by the third parties
General liability insurance will not pay for debts incurred by the employees and anyone else who you have hired in the in the company. It only pays third-party legal costs. Third parties could be customers, professional service providers or your suppliers.
2. The General Liability Insurance is a not a legal requirement but an essential part of the business transactions
The law does not require you to have general legal liability insurance. However, it is a requirement in many business transactions and contracts. Customers want to be sure that should anything go wrong in the contract; you are ready to take charge. That is why the policy is one of the requirements in the high-value contracts.
3. You may be required to present your general liability insurance policy when applying for business licenses
Some states require you to provide your general liability insurance policy when applying business licenses for such professional services such as electrical services, plumbing, motor vehicle mechanics, and so forth. Some states ensure that businesses can be able to handle legal costs such as paying for legal teams and compensation for the damage caused by your action (or inaction).
4. General liability insurance may pay the legal fees of the suing party
Should the party suing you win the case, the court is most likely going to ask you to pay the legal costs of the suit? General liability insurance may cover these lawyers’ fees and other legal costs such as witness fees and evidence costs incurred by the third party too.
5. General liability insurance can cover you should a random individual get injured on your premises
This insurance coverage is sometimes called ‘slip and fall’ insurance policy because it covers bodily injury accidents for visitors that come to your workplace. The law provides that you are to take charge of medical costs should someone get injured on your premises. Most likely than not, this will involve a lawsuit. This insurance policy takes care of the liability.
You can buy general liability insurance as a standalone policy or as part of a Business Owner’s Policy.