If business insurance were a birthday party, Commercial General Liability would be the cake. This the most basic type of coverage almost all businesses should purchase, and everything else then gets arranged around it. But like any party, you will have to plan to have more than just cake (i.e., other types of insurance policies will be needed).
General Liability Insurance is the base layer of insurance protection for small businesses. It offers benefits that can pay for several different things, but the two major elements are:
- Third-party bodily injuries and property damage
- Advertising injury lawsuits
1. Third-Party Bodily Injury and Property Damage Lawsuits
If a third party (i.e., a customer or partner) is injured while at your business, they could sue you for damages. For instance, a customer enters your bakery, slips and breaks her leg and her brand new iPhone. You could be held liable and be asked to cover the costs associated with her injury and the replacement of the iPhone. The costs could include things such as medical bills, lost income due to her inability to work while injured, legal fees, court expenses and settlements.
2. Advertising Injury Lawsuits
Many businesses do not have a physical storefront, and rather offer their services online. In such cases, the advertising injury coverage is critical. You are protected against lawsuits related to
- Slander and libel
- Copyright infringement
- Invasion of privacy
This coverage is very important for businesses with an online presence. It is very easy to accidentally infringe on a copyright (e.g., using a picture you found online), or for defamation (e.g., in a tweet about how your company is better than a given competitor).
Who needs General Liability Insurance?
Every business, even if home-based, needs to have liability insurance. There is always a risk of some form of physical or non-physical damage, so it is highly recommended to get this minimum insurance coverage. Additional policies can be purchased as needed to protect your businesses from risks specific to your industry.
What is covered? What is not covered?
General Liability Insurance may cover…
- Third-party injury (e.g., slip-and-fall)
- Third-party property damage
- Product liability
- Libel, slander, and defamation
- Copyright infringement
It typically does not cover…
- Professional errors
- Management and employee bodily injuries
- Damage to business property
- Employee discrimination
Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on startups. We understand what it is to be a startup, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.