How much general liability insurance is enough for your business?

General liability insurance is a safeguard for any business owner, because it protects him or her from claims related to bodily injury and/or damages that occur on their property. This coverage, sometimes called commercial liability insurance, can also help with various legal and medical expenses.

One of the first steps when getting insurance is learning how much protection you will need to cover all of your bases. Here’s how to determine the right amount of general liability insurance for your business:

Know your business

You can’t predict every bump in the road ahead, but you can assess how much general liability insurance you might need. It’s all about knowing your business and which factors will influence your coverage level. When calculating the amount of insurance you plan to buy, consider a number of key questions:

• What type of business do you have?
• How big is your business?
• Who are your customers?
• Where is your business located?
• How many employees do you have?
• How experienced are your employees?
• Where is your business housed?
• Do you have sole proprietorship?

The more risk that you take on, the more coverage you may need. As your business changes and grows, you might also find that your insurance needs will, too. This means that, eventually, you’ll need insurance with a broader reach. Monitor your business operations to figure out which areas could result in more liability.

Boost your basic policy

Once you know the amount of risk you’re taking on, you’ll have a better idea of which coverages to include in your overall insurance package. For example, commercial liability insurance covers a lot of ground, but it won’t protect you from all claims. So, in the event that your general liability insurance isn’t enough, you may consider add-on coverages, known as endorsements. These policy enhancements can protect your business from claims involving fire damage, liquor liability, employment practices, cyber attacks and other exposures.

If your company is low-risk, one option is a Businessowner's Policy, which includes general liability insurance combined with other important coverages. However, businesses with more liability may need coverage that goes beyond what’s included in a basic policy. If that’s the case, you can opt to add umbrella insurance to extend your coverage limits.

Talk to a licensed agent

While general liability insurance policies are relatively affordable, that doesn’t mean you need to pay more than what’s necessary for the best coverage. With the help of a licensed agent, you can make sure you are choosing the appropriate insurance package for your business. 

General liability insurance is a relatively small investment with big implications. Learn more about general liability insurance from Nationwide.