General liability insurance is a necessary part of the general liability coverage of business risk finance to protect the business owner from potential losses due to lawsuits, liability imposed by contracts and other claims, and legal fees paid out in the process. It also helps the business owner to retain control over their business should they be forced to pay out large sums in claims due to negligence or wrongdoing on their part.
General liability insurance is required in many states and may also be included in some personal injury insurance policies. These are the types of insurance that a business owner needs when they have employees are required to work in some cases without compensation, so these types of policies are not considered personal property coverage. This is why general liability insurance does not usually cover personal items such as clothing, furniture, jewelry, and electronics.
The purpose of general liability insurance is to provide a buffer between the business and all of its customers, employees, and suppliers, in case something happens to cause damage to the company or any of its assets. General liability insurance is also known as general risk insurance, or simply insurance. General liability insurance protects a business owner from paying out large claims that occur due to negligence or wrongdoing on the part of another party. Because liability insurance protects business owners against personal injuries caused by the products or services that the business provides, general liability is often considered an umbrella policy.
In order to determine whether you need to carry general liability insurance, it's best to look at the type of insurance that you carry in addition to general liability insurance. If you run a small business with a limited number of employees, then it would probably be in your best interest to just take out general liability insurance on the company. You can buy this type of insurance from your state's insurance department or you can purchase this insurance on your own. Buying insurance on your own provides you with more flexibility since you don't have to buy it through the insurance department in your state. If you choose to buy this insurance on your own, then you will want to find an insurance agent who has experience selling this type of policy.
While general liability insurance is necessary, some states are trying to encourage businesses to avoid taking out this insurance. States such as California, New York, and Massachusetts are attempting to raise the amount of general liability insurance in order to make business owners consider purchasing their own general liability insurance instead of using the insurance offered through their state's department of insurance.
As long as you have adequate general liability insurance, you will be protected against the financial losses that could occur as a result of injuries sustained while at the business, property damage, loss or theft, and claims arising out of your business. General liability insurance will . . . . . . also help to protect you should you be sued due to negligence or wrongdoing on the part of someone who is serving you as a customer or employee.