California has 4.1 million small businesses, accounting for 99.8% of the state’s total businesses and employing 7.2 million people, or 48.5 percent of the state’s total population. If you own a startup in California, you are a big contributor to the state’s economy, and you need business insurance to cover yourself from the unexpected.
Though a lot of startups in California ignore the significance of general liability business insurance, every startup owner in California needs to have the right business insurance in place so that they can save their business from impending lawsuits. If you don’t have one, you would have to pay for claims out of pocket, along with the legal expenses accompanying them.
What is General Liability Business Insurance?
General liability insurance is a type of business insurance that covers you and your company against “general” lawsuits, including physical harm and damage to property. General Liability Insurance is required by most startup companies, particularly if they lease or own an office or a commercial premise. For instance, it can protect you if you are found responsible for damaging your landlord’s property. Additionally, Commercial General Liability Insurance (CGL policy), is commonly beneficial to small companies that deal directly with clients and consumers, or meet customers in person, for example, advertising agencies, digital marketing agencies, artisan contractors, IT consultants, cleaning facilities, real estate agents, and so on.
If you are running a business, you could be sued for almost anything. For example, if a customer tumbles in your shop and gets wounded or hospitalized, or if they believe you did not complete the job as promised, you might be facing a lawsuit. In such circumstances, you may count on Commercial General Liability Business Insurance to cover the expenses of defending yourself. What’s more, it also protects you against advertising injury lawsuits, accidental copyright infringements or if anyone accuses you of slandering or libeling them. Thus, if you are sued by a client or business rival, this general liability business insurance policy will help keep your business afloat.
The Cost of General Liability Business Insurance California
Here are a few factors that can influence your general liability insurance costs:
- The Number of Clients: The more clients your company has, the greater the chance of receiving claims. Though this may increase the overall liability insurance costs, it will avoid lawsuits and keep the insurance premium down by keeping a secure environment for your customers.
- Type of Industry: Higher-risk startups usually need risk management. The result is higher insurance premiums for small businesses. For example, companies with heavy equipment have a higher risk profile than companies in office buildings. Similarly, construction businesses bear greater risk than accounting firms; therefore, construction businesses will have to pay more for insurance.
Additionally, your general liability premium is partially determined by the amount of insurance you purchase. The higher your overall coverage cap, the higher your small business liability insurance rates. The cost of your General Liability Business Insurance also depends on the number of workers employed in your startup, and the location of your business. Considering the importance of General Liability Insurance, most forward-thinking startup owners in California purchase it as soon as they start their company.
BOP— A Package Policy for Startups
Many startups in California buy a business owner’s policy (BOP) to get the benefits of both general liability and commercial property coverage. However, not every startup needs a BOP. A general liability insurance policy, for example, will suffice for a contractor because they do not own a commercial building nor do they have any payroll or other operating costs.
Conclusion
No matter how proactive you are in adhering to best practices and caring for your clients or customers, your company is still vulnerable to damages, accidents, and allegations of incompetence or misconduct, as well as false accusations of damage. Therefore, General Liability Business Insurance is a must-have for any company, big or small. Thus, without any further ado, you must consider having General Liability business insurance coverage for safeguarding your business against inevitable risks.