What is General Liability Coverage and Why Can 4x4 Crocs Cause a Claim???

If you saw the last blog post, you might have read that commercial general liability insurance is “an absolute must have for all business owners.” I stand by that statement, and in fact, I want to reiterate that statement one more time. Commercial general liability insurance is an absolute must have for all business owners.

Why? Well, put simply, the last thing you want to do as a small business owner is pay tens of thousands of dollars out of pocket. That’s what commercial general liability insurance is here for, avoiding those potentially bank-breaking costs.

Pfft, I don’t need that insurance, I know what I’m doing.

Who said that? No, not going to own up? Well, to whichever small business owner said that, I want you to know that about 4 out of 10 small business will have a liability claim in the next ten years, whether they are insured or not. That means you, my anonymous naysayer, have about a 40% chance of having a liability claim in the next ten years.

I’ve said it a lot now, but what exactly is commercial general liability insurance, and what does it cover?

For starters, the ‘commercial’ part of the name means that this insurance covers businesses. It is a general liability policy that protects businesses and business owners from paying typically high-dollar litigations out of pocket.

Among these protected claims are:

Third-party damage. Example. An employee of yours is helping load something into the back of a customer’s truck, accidentally denting the truck in the process. The customer is...not happy. Commercial general liability insurance protects you for claims against your business for injury or property damage caused by you or an employee of your business to a third-party and/or their property.

Bodily Injury to a person visiting your business. This is another type of third-party damage, and is one of the most common claims filed on a General Liability policy. We often call this “slips, trips, and falls”. This is when someone, a customer or not, visits your store and becomes injured due to (you guessed it) a slip, trip, or fall. Example. It’s 25 degrees. There’s ice on the ground. One of your patrons is wearing Crocs and has neglected to switch them into 4 wheel drive(put the strap down on the back). They slip on your sidewalk coming into your store and leave you responsible for their damages and medical bills.

Keep in mind that commercial general liability insurance does not cover claims in which your business property or personnel are damaged or injured—those would be covered by other insurance policies.

Copyright infringement and advertising damage. Copyright infringement is your (hopefully accidental) use of someone else’s work without their permission (most likely in the form of advertising). Advertising damage, on the other hand, is the damage that your business’ advertisement causes on another business/person’s reputation (this can also come from other avenues in which a business is represented, such as an employee or business owner defaming another in an interview).

Both of these damages are more intellectual and reputational based damages that a business might cause another person or business, but both types of claims are covered by commercial general liability insurance.  

No matter how confident you are in your capabilities as a small business owner—and we have no doubt that you are capable—you cannot perfectly control everyone and everything surrounding the business, it’s just not possible.

But if that’s not enough to convince you to call your local Town & Country Insurance agent right away to get Commercial General Liability Insurance outfitted to you and your business needs, I don’t know what is.

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