Chapter 2: Understanding Cleaning and Janitorial Insurance Policies
Part 2: Small Business Insurance Basics
General Liability Insurance
General Liability Insurance (GL) is the go-to insurance for your business's most common liabilities. For instance, you'll turn to GL Insurance if…
- Your client's employee is injured after slipping on a floor your business just cleaned.
- Someone enters your office and is hurt on your premises.
- You knock over and break a client's expensive vase.
- Your customer's property is stolen and your business is blamed.
- You are accused of copyright infringement or another advertising injury.
Each of these scenarios could result in expensive court battles and hefty judgments against your business if it's found liable for a third party's losses. A "third party" is a person who isn't employed by your business.
When your business is sued for a covered event, your GL Insurance steps in to cover your legal defense fees, settlements or judgments, and other court expenses (up to your policy limits). Most policies also cover hospital bills and immediate medical expenses (e.g., an ambulance ride) in the event that your business is accused of causing an injury.
So what kind of situations might prompt you to need General Liability Insurance benefits? They include the following:
- Premises liability. Though your office may not be accessible to the general public, your clients' premises likely are. So if your business creates the conditions that lead to someone's injuries on a client's property, you could be named in a lawsuit seeking medical damages. If you fail to provide basic controls (e.g., minimizing the work done during the business's operating hours) and warnings (e.g., caution signs), there's a greater chance that you could be successfully sued for liability.
- Property damage. The bulk of your GL Insurance protection comes from property damage liability coverage. Say one of your employees forgets to lock up the building after he's completed his cleaning work for the evening. If your client's property is lost, damaged, or stolen because of the oversight, your business could be sued for the loss. When that happens, your GL Insurance can step in to pay for the client's losses (if the event is covered by your plan). However, most GL Insurance policies exclude client property that is in your custody.
- Advertising injuries. Your business may run into trouble when advertising and marketing its services. Let's say you use a copyrighted image as part of your social media marketing strategy. If the copyright owner spots the infringement, they could sue you for damages. Other covered advertising injuries include slander, libel, and privacy invasion.
The actual cost of your General Liability coverage depends on a number of factors, such as…
- The number of years you've been in business.
- Your yearly revenue.
- Where your business is located.
- The number of employees you have.
- The cost of your annual employee payroll.
- The cost of your largest planned project.
- Your claims history.
Next: Chapter 2.2.B: Property Insurance
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