Business owners face Liability that could be catastrophic for their organization. When a customer files a lawsuit against the business owner, there is a 50% chance that the business will lose. When this happens, the business owner could face a cost that closes down their business.
General liability insurance coverage is designed to help business owners mitigate the financial costs of accidents, risks, and common liabilities. It pays for certain costs related to these claims, and the business owner could decrease their payout through a settlement. The terms of the policies define how much coverage the business owner has and what level of protection they have against economic damages.
Property Damage Claims by Customers
Businesses complete a variety of services at the customer’s home, and the workers must follow careful strategies to prevent property damage. However, when property damage happens, the workers must complete steps according to company guidelines to correct it. If they do not, the property owner will report the property damage to the company owner.
The company owner has a few opportunities to redeem themselves in the client’s eyes. Unfortunately, these additional services increase costs for the business owner, and they need insurance to offset these losses. Business owners can learn more about general liability insurance by contacting Feingold Companies today.
The Cost of Medical Care for Customers or Visitors Who Are Injured
Visitors or customers that become injured when visiting the commercial property need coverage for their medical expenses. Businesses that purchase general liability coverage get payments for these medical expenses and decrease their out-of-pocket costs. The standard protocol for these premises liabilities is to contact emergency services and send the visitor or customer to the emergency room.
The hospital sends the company an invoice for the expenses, and the business sends a claim to their insurer for these costs. If they don’t have insurance coverage, the business owner has to pay these expenses out of pocket. If they do not take action, the victim could start a legal claim for their injuries.
False Advertising Claims
False advertising claims are started when a company makes claims about their products that are not true. For example, if the advertising materials guarantee specific results for a diet pill without a disclaimer, it is the same as the business guaranteeing that everyone will lose a specific amount of weight.
When the results aren’t the same as advertising, consumers can file a legal claim against the company based on the company’s claims in advertising. It is vital for the business to evaluate all claims in their advertising to avoid these obstacles and the damage to their reputation.
Financial Losses Incurred During a Lawsuit
When a client files a lawsuit for any reason, there is the potential for a financial loss, and the company must be prepared for these losses. There are not any guarantees when it comes to attempts to prevent a monetary award.
However, general liability insurance gives the business owner a chance to decrease the financial loss through a settlement offer. If the claimant accepts the settlement, the company mitigates their expenses effectively.
However, claimants do not accept all offers, and the business will experience financial losses if they lose the case. The insurance can prevent them from facing a dire loss that prevents them from operating their business.
Pays for An Attorney for the Business
When fighting a lawsuit, the company owner will incur legal fees, and they will pay an attorney upfront fees before the lawyer accepts the case. As the case continues, they will incur additional costs according to the billable hours applied to the case.
The general liability insurance provides the company with coverage for their legal fees if they become a defendant in a lawsuit. The coverage prevents the business from facing excessive costs on their own that take away from the company’s profits or generating a major loss.
Avoiding a Complete Shutdown of the Company
If a company faces a serious financial loss, there is a possibility that the company will be forced to shut down entirely. For a small business, a lawsuit could become a major catastrophe and require the owner to sell all their assets just to pay the monetary award. To avoid these serious financial losses, the business owner can purchase general liability insurance.
The coverage gives them adequate funds to cover the cost of monetary damages if they lose a lawsuit and the claimant’s award is higher than average. For many business owners, the policy could give them the safety net that prevents them from losing their company and all profits.
When You Need the Coverage
Businesses will need general liability coverage if they have a physical location for their business. If they have clients or vendors that come to the property regularly, the property owner could face liabilities that might lead to a lawsuit. Businesses that advertise their company or products need coverage just in case a claim is filed against them for false advertising. Any company that presents marketing materials or information about their company or products needs general liability coverage to protect their organization.
Commercial Umbrella Coverage
An umbrella policy is beneficial for business owners since they add more than one policy into the design. By adding all their policies together, they get a discount on their premiums and save money on these expenses. They can also increase their coverage level through any policy and get more out of their investment.
Business owners conduct risk mitigation that helps them discover what risks they face every day. These risks may lead to a lawsuit if the business owner isn’t careful and they may overlook vital details and generate a financial loss.
They face lawsuits for property damage, contractual obligations, and accidents at their physical location. Unfortunately, even with the most shrewd legal representative, they aren’t guaranteed to win the case, and the business could shut down completely if the lawsuit awards are higher than average. General liability coverage could provide the right level of coverage, and the business could avoid major financial losses altogether.