General liability insurance is one of the most effective tools for shielding your small business against unnecessary risk. To put it most succinctly, a general liability policy will protect your business against any claims of injury or physical harm that occur on your property. In addition, a general liability policy can sometimes help offset certain legal costs or medical expenses.
While we recommend general liability insurance for virtually all businesses, there’s one question that warrants closer consideration: Exactly what level of coverage does a business require?
No Cookie-Cutter Answers
The short answer: It all depends. All businesses are different, and all businesses encounter different hurdles and obstacles. You can’t predict every bump in the road that your business will experience, but you can still make a smart assessment of how much general liability coverage your company needs.
To take stock of your insurance needs, start by answering these questions about your company:
- What type of business do you have?
- How big is the business?
- How many employees?
- Where is your business physically located?
- Who are your customers?
- What level of training/experience do your employees possess?
Answering these questions can be a good way to size up your business risk; and of course, the more risk you take on, the more general liability coverage you’ll want. With that said, it’s also important to keep in mind that businesses grow and change. As your business expands, evolves, or branches out, you may need an insurance policy with broader reach.
What’s the Average Policy Limit?
Just to provide a general rule of thumb, most small businesses have a general liability policy limit of at least $1 million, with some companies opting for coverage of $2 million or more. Again, all businesses are different, and there aren’t any cookie-cutter solutions. But if you’re unsure of how much coverage to invest in, this is the ballpark you should probably be in.
Talk to a Licensed Agent
General liability insurance is an important way to protect your small business. If you’re underinsured, or don’t have any coverage at all, we invite you to call us. We’d love to walk you through policy options that fit your business’ specific needs. Reach out to FullHR at your next opportunity.