Monday, November 6, 2017

Is California Business General Liability Mandatory?

Business owners have most likely come across the term “General Liability” at some point while discussing business insurance requirements. But what is this coverage and is it required for all business owners? California law requires only one type of insurance and that is workers compensation insurance for companies with employees. Thus, general liability is not mandatory for state law but can be needed as you continue your business, whether you are applying for a license or trying to meet the requirements of a client. You will come to find out that although not a California requirement, general liability coverage will open up more opportunities for your business while also serving vital protection to your company in the event of a lawsuit. Let’s take a look at what general liability is, why you need it, and how to apply for a general liability quote!

Business Insurance General Liability

What is Business California General Liability?

General Liability protects you, as the business owner, if you are found liable for any injury or property damage suffered by a third party (such as a customer or guest) as a result of your business activities. This coverage includes defense and investigation costs in the event of a suit or claim against you, as well as any settlement payments.

General Liability insurance not only protects you but also anyone affiliated with your business including executives, stockholders, directors, partners, spouses, employees, volunteers, and any person or organization you have an indemnification contract with.

There are many different coverages included in a general liability policy. Some of the common coverages include:
1. Bodily Injury- covers a third party’s injury or sickness that your business is found legally responsible for by paying their medical bills, loss of income, and payments to their families in the event of their death.
2. Property Damage- pays for the physical damage or loss of use of another’s property that is deemed as a result of your business or your negligence. However, this will not cover  damage of someone’s property that you provide a service to (such as a mechanic working on a client’s vehicle).
3. Products-Completed Operations- covers injuries that resulted from your product or service
4. Personal Liability- protects against claims of non-physical damage to another such as publishing false info and slander.

In addition to these coverages, others can be added to fit the needs of your business better such as hired auto & non-owned auto or liquor liability. Talk to an agent to find out what coverages to include in your general liability quote to meet the needs of your specific business.

Why Do You Need General Liability?

As mentioned before, although general liability is not a state requirement/law, it is still commonly requested by people you work with or who you have to sign a contract with. Thus, general liability quotes can open up opportunities to work with more clients.

Clients commonly require general liability from companies they hire because it means that if you are sued, you will still have financial protection against that suit to stay in business and finish the job you agreed to do. It also means that you have the finances to pay for damages or an injury that you may have caused toward your client. They see that you are not as much of a risk to work with and they have the peace of mind that you will take care of any incident that should arise because you are properly covered by your general liability policy and no liabilities will be directed their way.

How to Apply for Business General Liability?

Most business owners apply for general liability coverage shortly after they start their company as it is usually required for applying for professional licenses and signing a lease for an office space.
When applying, business insurance companies will first look at your business’ history of insurance claims and what type of work your business does to assess how big of a risk it is to insure you. If you are in a high risk line of work or have a history of being sued, you may have fewer options for insurance as many insurance carriers may decline to work with you. Fortunately, there are still quote options for high risk businesses so make sure you discuss these with a business insurance agent.

California General Liability is not a one-size-fits-all policy and so the coverage you include on your policy should be tailored to meet your business’ specific risks. For example, some companies like a toy manufacture should make sure to have product liability coverage should a child get hurt from one of their toys while other companies could afford to skip this. Provide details into the operations of your business to an expert business insurance broker who will be able to help you in customizing your general liability policy.
While applying, you also may want to consider if you would like an individual policy for general liability coverage or if you want to include this coverage in a business owner policy or BOP. A BOP is a business insurance package that offers common insurance coverages for small business owners including general liability. Talk to a broker today to discuss which is better for your business.

Getting Started!

By filling out an application, providing information on your business, and working closely with an insurance broker, you are sure to have great general liability insurance quote options for your business in no time. Contact a broker today to obtain quotes and compare the costs to find the best rate and fullest coverage that you and your business deserve!