General Liability Insurance

The amount of general liability insurance coverage a business needs will depend on two major factors:

• The risk exposure of the business: Business owners should first consider the amount of risk associated with their business. This will typically depend on the industry and the nature of the work that the business does. For example, a business that manufactures heavy machinery takes on greater liability risk than a company that manufactures pillows, and will likely opt for more coverage.
• The location of the business: Different states tend to approach liability claims & lawsuits differently. Some states are more likely to award higher damage amounts to plaintiffs typically and businesses that operate in such states will need higher amounts of coverage.

General liability insurance policies always state the maximum amount that the insurer will pay during the policy period. Usually, these policies also list the maximum amount the insurer will pay per occurrence. For example, if a company has a $500,000 occurrence cap in its liability policy and it's successfully sued for $750,000, the insurer would pay $500,000 and the business would be responsible for paying $250,000.

To extend a general liability insurance policy maximum, many companies purchase commercial umbrella insurance. With commercial umbrella insurance, if a liability claim made against your business exceeds the limits of your primary liability policy, Commercial umbrella insurance can help pay the additional costs of the claim.

Taking precautions before an accident can help keep your liability and insurance rates down. The following  precautions will go a long way toward lowering the likelihood of a liability insurance claim against your business:

• Keep your company records up-to-date.
• Get safety tips for your type of business from your insurance company.