General Liability insurance

Frequently Asked Questions (FAQ)

• How do I know I have the right coverage for my business?

  Embroker has published a bunch of great resources to help you on your insurance buying journey. Check out the Embroker Resource Hub for articles on coverage, guidance on insurance costs, and what you’ll need to get a quote.

  If you’re completely new to insurance buying, read our article on what is commercial insurance.

  You can also connect with a broker at any time to get help identifying your coverage gaps.

• Why do you need General Liability insurance?

  The simplest answer to this question is because people like to sue each other.

  A suit can be filed against your business for just about anything. It can be a claim of bodily injury, damage to property, or even libel and slander. CGL coverage can protect you if you are sued, help you pay for the legal fees associated with fighting the charges, and even with the money you need for a settlement if you don’t want to deal with the court case.

  There are several obvious reasons, societal trends, that show us that general liability is needed now more than ever. One of them is violent events, especially the recent rash of shooting incidents across the country, with more than 50 percent of these tragic events over the course of 2016 and 2017 occurring in either commerce, government, or educational environments.

  The importance and dominance of technology in today’s society and the concept of a shared economy with businesses collaborating more and more are also two things that are blurring the lines when it comes to liability and trying to figure out the right type of coverage for your business that is going to protect it thoroughly.

• When do you need General Liability insurance?

  Most businesses should start looking into purchasing some type of general liability coverage right away, as soon as they are founded. The reason for doing it right away is not just because you should be protected from the start, you can also be asked to show your proof of coverage when signing contracts with larger companies, signing office leases, and even applying for a professional license to work legally.

  Having general liability coverage offers reassurances to companies and clients that are interested in working with you and shows them that your finances are fairly secure.

  Clients and businesses want to work with companies that are secure and stable, not with companies that could go bankrupt as the result of one liability lawsuit, which is exactly what could happen to any burgeoning business that gets sued without having purchased coverage beforehand.

• How do you apply for General Liability insurance?

  When you are applying for commercial general liability coverage, the insurer will want proof of the fact that investing in your business is not a risky proposition.

  Before you get the insurance, the prospective insurer will no doubt look at your business’s past history of claims and evaluate the type of products or services that you provide to determine what potential threats and risks exist in your line of work.

  Generally, you’re not going to get a lot of pushback, and getting a CGL policy should be no problem unless your business poses a very obvious and serious risk to you and your customers. But unless you’re giving tightrope-walking lessons with no safety net, you should be able to get the right CGL coverage easily. You can get an instant general liability insurance quote in just a few minutes with Embroker.

• Who benefits most from General Liability insurance?

  If you are a business owner who deals with and employs other people in some way, you need commercial general liability insurance. Even if you think you’re unlikely to face a lawsuit, insurance is always a wise (and fairly affordable) investment. Few people regret buying insurance but many people regret not buying it.

  General liability insurance is absolutely for everyone, not just big businesses. Even if you are working as an independent consultant, contractor, or tradesperson you should have this type of coverage.

  As a business owner of any type, you have enough to worry about. Business general liability insurance can give you peace of mind by helping you manage your business risks.

  The type of coverage you need depends on your industry, so it’s important to talk to someone who understands your industry and your business’s specific needs.

• Is General Liability insurance required by law?

  You are not required by law to carry general liability insurance. However, keep in mind that local governments will typically require that you have a GL policy to be issued a business license. Additionally, most venues and office spaces require that you carry liability insurance.

• What does General Liability Insurance cost?

  One of the biggest factors that determine the cost of general liability insurance is your specific industry and business. If you’re a freelance contractor who works from home, chances are you interact with far fewer people than a convenience store owner. In general, the construction industry tends to pay some of the highest rates for insurance because they usually do work on other people’s properties.

  Your business is unique and your coverage needs are as well. The types of services you offer, how many employees you have, and the types of risks your customers face all contribute to the cost of your premiums. If you want a general liability insurance policy with a high coverage limit then you should expect to pay more for it.

  According to research performed by Liberty Mutual, the largest expenses associated with GL claims today are legal fees, adding that there are several litigation trends that are actively contributing to higher claims costs, including litigation funding (outside investors fronting legal fees in exchange for a percentage of the potential settlements of judgments), traumatic brain injuries (an increased number of plaintiffs’ lawyers alleging traumatic brain injuries at the onset of claims), and escalating verdicts (larger trial verdicts).