How High Should I Set My General Liability Insurance Policy?

General liability insurance is a flexible coverage that protects your business from certain claims and lawsuits related to common accidents. There are different limits available for general liability insurance policies that can be adjusted depending on your business’ needs, so it is important to consider different aspects of your business when it comes to finding coverage. 

How High Risk is Your Business? 
Risk refers to the likelihood that your business will be sued or that you will have to file a claim on your general liability insurance policy. The higher the risk, the more insurance coverage you may need. There are different ways to evaluate risk. 

First, consider your industry. Businesses often fall into categories known as “low risk” or “high risk” industries. A high risk industry is one where claims are likely, frequent, and/or expensive. Speaking with an insurance agent can help you determine whether or not your industry is high risk, as insurance providers consider risk levels when calculating quotes. 

The other factor is your business’ unique history. Has your business ben sued before? Have you had a history of claims or lawsuits? If so, you may want to invest in a general liability insurance policy with higher limits. 

Size of the Business 
The larger your business, the more insurance you may need. This is because the more employees and customers and locations your business has, the more risk you face of an accident or lawsuit. For example, a business with multiple locations will face a larger chance of someone slipping and falling in one of their locations than a business with only a single location. 

Claims History 
If your business has been sued in the past, this may be a hint to purchase higher liability insurance. Bad luck follows itself and you could face a related (or even unrelated) claim in the future. Consider adding higher limits based on the cost of your business’ past claims. Previous experience can give you an idea of how much coverage you need in case of another accident. 

When in doubt, speak with an insurance agent about your business and its general liability insurance needs. You can also add additional liability coverage with an umbrella liability insurance policy. This type of policy fills in gaps left by your other business’ liability insurance coverages, including general liability insurance, professional liability insurance and more.