General liability insurance offers protection to businesses from physical risks like bodily injury, property damage and accidents. Meanwhile, professional liability insurance offers protection from financial risks often caused due to errors, negligence or bad advice in your services.
People often choose between these two but the reality is that businesses need both. Both of these become a necessity if you have a business in which you interact with customers physically and provide expertise or services.
What Is General Liability Insurance?
Professional liability insurance also called business liability insurance, general liability insurance is the foundation of risk protection for most companies. From bodily injuries, property damage to advertising related issues, it covers claims for all. Here’s a look at what all is covered in general liability insurance
- Customer injuries at your premises
- Damaged caused to someone else’s property
- Legal costs of lawsuits
- Advertising injury such as copyright infringement, defamation
To understand this better, let us consider that you own a retail clothing store in Texas. On a rainy day, a customer walks in and slips on the wet floors and ends up breaking their wrist. After this, they sue your business for medical expenses and lost wages. In such a case, if you don’t have general liability insurance, you will be bound to pay for all of this. However, with general liability insurance all costs of legal defense, settlements and medical costs will be covered.
Who Needs General Liability Insurance
General liability insurance is important for businesses that
- Have a physical location
- Interact with customers physically
- Handle products or equipments
Most common industries using this type of insurance include
- Retail stores
- Contractors & construction businesses
- Restaurants & cafes
- Small local businesses
If you own a business that requires you to interact with costumes or it operates on-site then getting covered is very important for you. Get an instant quote for general liability insurance from ALKEMEINS today.
What Is Business Liability Insurance
Business liability insurance offers protection to businesses that offer services, advice and expertise. Unlike general liability insurance, business liability insurance offers protection from financial harm caused by mistakes, negligence or failure to deliver promised results. Here’s a look at what all is covered in business liability insurance
- Errors in your work
- Missed deadline or incomplete services
- Negligence or failure to meet professional standards
- Legal defense costs for client lawsuits
If you’re still skeptical about investing in business liability insurance, then let's consider a real-life example. A marketing consultant in your company in California recommends an ad strategy to a client that is flawed. Due to this strategy, your client ends up losing $50,000. Following this, your client decides to sue your company for all the damages. If you will have business liability insurance that all the legal fees and potential settlement costs will be covered.
Why Is Business Liability Insurance Is Important
Even if you had zero intentions to cause any financial loss, your client can still sue your company for a financial loss. Without business liability insurance, you will end up losing tens of thousands of dollars.
Who Needs Business Liability insurance
- Consultants and freelancers
- Marketing agencies
- IT professionals and SaaS companies
- Accountants, designers, and coaches
If you own a business that involves giving advice or delivering services, then invest in business liability insurance today and protect yourself from hefty financial claims. Get in touch with Alkeme today for your customized quote.
Differences Between General Liability insurance & Business Liability Insurance
What Kind Of Businesses Need Both Policies
There are times when certain modern businesses don't fit in any one particular category because they are prone to physical and professional risks. Here’s a look at businesses that need both: general liability insurance and business liability insurance.
- Agencies (Marketing, Creative, Digital)
Such agencies need both types of insurance because they not only meet clients in offices (physical risk) but also provide advice (professional risk.
- Consultants & Coaches
Even if you are a consultant or a coach who worked remotely, client meetings, workshops, events introduce you to physical exposure.
- Contractors & Construction Firms
Contractors and construction firms are prone to physical hazards at job sites and advisory risks because of design errors and project miscalculations.
- SaaS & Tech Companies
General liability insurance will offer protection from office-related risks and third-party injuries. Meanwhile, business or professional liability insurance will offer protection from software failures, data errors and unmet performance claims.
Why Overlap Matters
For example, you own a web development agency that is hosting a client meeting. A client enters the office and trips immediately. In such a situation general liability insurance will come into play. On the other hand, if the client website designed by your company crashes during launch, you’ll be offered protection by business liability insurance.
If as a business owner you’re confused about which type of insurance will be the right fit for you, then get expert guidance and tailored coverage from https://alkemeins.com/.
Cost Of Liability Insurance In U.S
Cost of general liability insurance and business liability insurance is determined by the type of industry, business size and risk exposure. Average cost of general liability insurance can be somewhere between $40-$150 every month or $500-$1,800 annually.
For business liability insurance, the average monthly cost will be around $50-$200. The annual cost for the same can be around $600-$2,500+.
What Affects Your Insurance Premium
- Industry risk level
- Business revenue
- Number of employees
- Coverage limits and deductibles
- Claims history
Bonus Cost-Saving Tip
Did you know that bundling policies or working with an independent broker can help you reduce the cost of premiums and also improve the coverage quality.
How To Choose The Right Coverage
Picking the right general liability insurance and business liability insurance can be very challenging and confusing at times. Consider the following factors to make the right choice.
- Do you have customers visiting your location or interacting with your business physically?
If your answer is yes, then you need general liability insurance.
- Do you provide advice, services or expertise to clients?
If yes, then you need business liability insurance.
- Do you do both?
If yes, then you need both types of insurance.
Here are a few more things that you should consider before investing in insurance:
- Client contracts
- Leases
- Industry standards
Get your Commercial Insurance Quote Today
Choosing the right business liability insurance or general liability insurance doesn't necessarily have to be a complicated and tedious task. However, one has to be very careful while choosing the same because a wrong choice can make them lose several hundred thousands of dollars.
Whether you’re a small business owner, consultant or an agency that is expanding, it is always better to have coverage that protects you from accidents and professional risks.
Here at Alkeme Insurance, you can
- Get fast and customized quote
- Compare policies that are customized to your industry
- Work with professionals who understand your business risks
Take a step forward towards protecting your business with ALKEMEINS
Final Thoughts
It can be said that general liability insurance and business liability insurance cater to two very different kinds of needs. General liability insurance protects against physical and real-world incidents, while the latter offers protection from financial and reputational damage caused by your work. If you own a business that requires you to interact with people, provide advice, services then investing in a right business liability insurance is not an option- it’s a necessity.
