Introduction
Starting and running a business as a Limited Liability Company (LLC) offers many benefits, including personal asset protection and flexibility. However, despite the advantages, an LLC is still vulnerable to risks such as lawsuits, property damage claims, and injuries. General liability insurance is a critical safeguard against such risks, ensuring that a business can operate without facing crippling financial consequences.
This guide explores everything you need to know about general liability insurance for LLCs, including its importance, coverage options, costs, and how to choose the best policy for your business.
What is General Liability Insurance?
General liability insurance (GLI) is a type of business insurance that provides financial protection against claims arising from third-party bodily injury, property damage, and advertising injury. It covers legal fees, medical expenses, and settlement costs associated with these claims.
While an LLC provides some legal protection by separating business and personal assets, it does not shield a company from liability claims that can arise from day-to-day operations. General liability insurance bridges this gap, making it an essential investment for any business.
Key Coverage Areas
A general liability insurance policy typically covers the following areas:
- Bodily Injury – If a customer or third party sustains an injury on your business premises or due to your business operations, this coverage helps pay for medical expenses, legal fees, and damages.
- Property Damage – If your business activities cause damage to someone else’s property, your insurance can cover repair or replacement costs.
- Personal and Advertising Injury – Protects against claims of libel, slander, copyright infringement, and false advertising.
- Legal Costs – Covers attorney fees, court costs, and settlements or judgments if your business is sued for a covered claim.
- Medical Payments – Pays for medical expenses if someone gets injured at your business location, regardless of fault.
