Insurance Basics: Everything You Need to Know

4 Tips to Help You Purchase the Right General Liability Insurance Policy

When it comes to protecting your business, one of the best options is purchasing a general liability insurance policy. A general liability insurance policy can save your business if you find yourself facing a lawsuit. When purchasing the policy, there are a few things you need to consider in order to get the best possible coverage for your business.

#1: Evaluate Your Risk Level

First, you need to sit down and come up with a list of situations that your business could be sued over. For example, if you run a retail store, you could be sued due to a trip and fall accident by a customer. Or if you run an accounting firm, you could be sued for making a mistake the results in a financial consequence for your clients.

Knowing the type of risks you could face and how expensive those risks could be will help you establish your risk level. Additionally, general liability policies don't cover all types of risk your business could face, so this list could help you identify if you need more liability coverage than you would get with general policy.

#2: Determine the Value of Coverage You Need

Second, you need to determine the value of the coverage you need. This may be determined by the type of situations that your business could be sued for. It is generally best to err on the side of more coverage than less coverage. For example, you could go with a policy that provides you with a $100,000 worth of coverage or a million dollars. Consider the risks facing your business and your business assets when determining what financial level of coverage you need. Your insurance agent may be able to tell you what levels of coverage are common within your industry. You can ask fellow business owners in your industry what level of coverage they have.

#3: Determine What Type of Policies You Need

Third, you need to determine what types of liability coverage you need. For example, most businesses need general liability insurance which covers medical costs if someone is injured at your business and property damage claims against your business. Depending on the type of work you do, you may need more coverage than that.

For example, as an accountant, you would also want to get professional liability insurance, which protects you against negligence claims due to mistakes in your work. Any business that produces specialized work for a client would want professional liability coverage. If you sell a product to the public, you want product liability insurance to protect you against claims due to damages or injuries caused by a product.

#4: Always Review Your Coverage

Once you have your liability coverage in place, take the time to review your policies once a year. Your business' needs can and will change over time, and you need to make sure you have the protection you need. Learn more by contacting companies like the AAC Insurance Group.