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General Liability Insurance for Small Business

General Liability Insurance is the foundational building block for almost all small business insurance programs. Understanding some of the key components that go into these general liability insurance policies can help a small business owner in obtaining liability insurance quotes and in the actual purchase of their commercial insurance policies. Below we are going to take a look at the standard commercial general liability for small business policy that is used in almost all of the 50 states.

  • Business liability each occurrence: This policy is typically written with a business liability each occurrence limit. The business liability occurrence limit can start out as low as $100,000 and go up to as high as $2 million. The typical business liability each occurrence limit is normally $1 million. This coverage specifically provides protection for bodily injury and property damage claims that you become liable for.
  • Business liability general aggregate: Typically the business liability general aggregate is twice the limits of the business liability each occurrence limit. Thus, if the business liability each occurrence limit is $1 million then the business liability general aggregate would be $2 million. Although, the business liability general aggregate can also be written for the exact same amount as the business liability each occurrence limit. An easy way to remember what general aggregate really means in layman’s terms is that this is the maximum amount that it insurance company will pay in anyone policy year. This prevents the stacking of limits. This also prevents attorneys from saying that the claim occurred 30 times during the policy year and thus the potential for the insurance company to have to pay $1 million times 30 times in one policy year.
  • Products/completed operations aggregate: This aggregate limit is also normally twice the limits of the business liability each occurrence limit. So, if the business liability each occurrence limit is $1 million then up products/completed operations aggregate would be $2 million.
  • Personal and advertising injury: This limit is normally the same limits as the business liability each occurrence limit. If the business liability each occurrence limit is $1 million in the personal and advertising injury limits would be $1 million. This coverage provides protection for the personal injury of a person that is not bodily injury or property damage. It also provides protection for unintentional liable and slander claims.
  • Damage to premises rented to you: This limit varies by insurance company but is normally $300,000. This coverage provides protection to pay for damages that you cause to the premises in your care custody and control. This coverage is not applicable if your own property.
  • Medical payments: This is a Good Samaritan type of coverage in that it pays medical bills to third parties who become injured on your premises even though you are not legally liable. The limits for this coverage do vary by carrier but is normally $10,000. This protection is not available for you and/or your employees. This is for your clients and/or other third parties that come on to your premises. You normally have up to one year to ask for this coverage to pay for claims that it happened on your premises.

General Liability Insurance normally provides much broader coverage and protection than the average person perceives. Hopefully, this quick summary of the coverages will help you as the consumer to be more comfortable in obtaining small business insurance quotes.

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