General liability is a type of business insurance that protects an enterprise’s assets and covers obligations in case of claims, lawsuits, or settlements. These may result from property damage, reputational harm, copyright infringement, or bodily injury. Without general liability insurance, businesses are more exposed to lawsuits and bankruptcy – that is why it has become an indispensable part of any company.
That being said, here are the various reasons you should add general liability insurance to your policy portfolio:
It is legally required
Most states’ legal requirements involve general liability insurance. So, if your business does not have one, consider taking a look at your state’s regulations. Even if yours doesn’t require this type of business insurance, it would be best to buy one because it can keep you safe from financial loss. Also, it can help in situations like:
- a client sues you after getting injured while on your property
- a natural disaster like fire threatens your corporate building
- a device containing sensitive data is stolen
You do not have to fear accident and injury claims
Although you are doing your best to avoid such incidents, sometimes these are inevitable and cannot be prevented. This is exactly why you should have general liability insurance in place. And let us not forget that injury claims come with legal costs that can affect both your reputation and profits. In the event an employee or customer sues you because of an accident at the workplace, it is better to be prepared. With this type of insurance, you can cover the related costs without getting involved in legal proceedings.
Third-party property damage protection
Cases when someone else gets injured on business property are common, but so are those when a business unintentionally damages someone else’s property. You must be prepared because a third party is involved in the latter situation.
You could close larger contracts
You may be wondering what this has to do with general liability insurance. Well, a lot. Such insurance can increase your brand credibility and put you ahead of the competition. Not to mention that investors and clients would be more interested in closing a deal with you since most companies these days require you to have insurance before bidding on.
You might receive compensation for a data breach
Data breaches are not that uncommon, especially when it comes to businesses. After all, we live in a data-driven era. You never know when a malicious actor becomes interested in your customer’s sensitive information, so having insurance in force could help to cover you against a potential cyber threat. Therefore, consider protecting your company’s most valuable data by adopting this safety practice. Most policies nowadays should contain a provision for electronic data liability, but if not, you can anytime get cyber liability coverage specially destined for cyber-attacks.
As the old saying goes, better safe than sorry. This also applies in businesses, where the line between liability and risk is so tight.