General Liability Insurance: What You Need to Know

As a small business owner, there are several types of insurance to consider. Some types are optional and others are mandatory, so it’s important to work with an insurance agent who can determine your risk and the coverage you need. One type of insurance that is typically non-negotiable is general liability.

General liability insurance in NJ helps cover the cost of liability claims made against your business. For example, if a customer slips and falls in your store, they could make a claim. Rather than paying out of pocket for the damages, general liability would cover some or all of the costs. Most New Jersey businesses are required to carry general liability.

Things to Know About General Liability Coverage

Most business owners have questions about general liability and how it works. Below we cover the most important things you need to know about this coverage.

  • What does it cover? General liability is primarily designed to cover bodily injury and property damage for which you are liable, though there are additional coverages usually included as well.  It can cover you for incidents that happen on your property (premises liability), damage that is caused to someone else’s property, product liability, advertising injury, libel and slander. Because this insurance covers customer injuries and damage, it’s one of the first policies that business owners purchase. You would hate to lose your business over one injury, but it has happened.
  • What doesn’t it cover? There are some things that general liability won’t cover. This includes damage to your own business property, professional errors, employee injuries and employee discrimination lawsuits.  This list is not exhaustive, and there can be exclusions, so it is important to consult with an experienced agent or broker. To fill in the gaps, you will need other types of business insurance in NJ, such as errors and omissions insurance, business auto and workers’ compensation.
  • Who needs it? Almost every business needs some form of general liability coverage to protect their assets, sign important contracts, rent commercial space and avoid bankruptcy. Carrying this insurance also lets customers know that you can compensate them if they become injured on your property.
  • What coverage do I need? Each business requires a different level of coverage. Coverage is based on your perceived risk, the types of products your business makes and your location. Generally speaking, most small businesses need between $500,000 and $1 million in coverage to start.  Sometimes you will also be required to carry higher limits by clients, general contractors, governmental entities, etc. For example, to qualify for the NJ Home Improvement Contractors license you are required to carry at least $500,000 per occurrence.
  • How often should I have it reviewed? Just as you review your home and auto policies each year, you should do the same for your business insurance. Working with a hands-on agent ensures this is done automatically. As your business grows and changes, it’s likely that your coverage options will need to be adjusted as well.

General liability insurance keeps your business safe and protects your personal assets. Soden Agency recommends this type of coverage to almost all business owners. To learn more about your coverage needs, contact our insurance agency in NJ. Our experts will make sure that your business is protected.