Commercial general liability is a form of business insurance that covers claims of injury, illness and property damage against your business. It is primarily a term used for policies in the United States. In the UK, this cover is more widely known as ‘business liability insurance’, or separately as - ‘public liability insurance’ and ‘product liability insurance’.
What does general liability insurance cover
The chief purpose of general liability insurance is to cover claims made by members of the public against your business. These claims could be for bodily injury, illness or property damage caused by your business’ work or a product you have sold or produced. For example, if a member of the public slipped on a wet floor on your business premises and hurt themselves, if a child is injured by a faulty toy you sold, or if you visited a client and spilt a drink over their computer.
In the UK, public liability insurance and product liability insurance serves to protect businesses from these claims and the potential financial losses as a result.
To understand how these covers benefit businesses, it’s worth considering the financial implications of an unexpected accident. If a third party were to get injured as a result of your work, they may decide to press charges. This could lead to costly legal proceedings and a potentially financially crippling settlement payout if you are found to be responsible. With general liability insurance in place, these costs could be covered by your insurer.
What is the difference between Public Liability and General Liability Insurance?
‘General liability insurance’ is a broad term used for insurance that covers ‘general’ claims involving bodily injury and property damage caused by your work or a faulty product produced or supplied by your business. It covers for risks associated with working with or selling to the general public, whether directly or as a result of working in a public space.
How much general liability insurance do I need?
Your cover level is the maximum amount that your insurer will pay out if you make a claim. The level of cover you will need depends on your industry, the type of work that your business does or the type of products you sell and whether your clients require you to have a certain level of cover. Government or local authorities are particularly likely to ask that suppliers have between £5 million and £10 million general liability cover.
As general liability insurance is not a legal requirement, it will be up to you to decide how much cover you want to take out. You can gauge the level of cover you by considering the maximum cost you could face in a worst-case scenario. Think about the scale of the work you do and the level of risk you face each day. Also take into account things like medical costs or the loss of income you might suffer if an accident results in you shutting down business for a period of time.
Hiscox offers up to £10 million of public liability cover.
How much does general liability insurance cost?
The price of a comprehensive general liability insurance policy for your business depends on a number of factors, including business size, turnover, type, industry and location. When calculating premiums, insurers predict how likely you are to make a claim, and how much they believe that claim would cost. Your claims history and the level of risk your business undertakes will also come into play – for example if you use dangerous machinery or your premises experiences a high volume of visits from members of the public.
Public and products liability insurance quotes from Hiscox start from just £55 a year for some businesses (based on policies from at least 10% of our customers). Get your public liability insurance quote online in minutes.
What does general liability insurance cover for contractors?
As a contractor, it is likely that you will be visiting client sites or that clients will be visiting you on your own premises. General liability insurance can cover you in the instance that a third party is injured while your work is being carried out, or if somebody else’s property is damaged as a result of your work. For example, a painter and decorator’s ladder falling onto a passerby and injuring them, or a landscape gardener accidentally smashing a window.
While it is not a legal requirement for contractors to have general liability insurance in the UK, some clients may ask for you to hold a level of general liability cover as a term of contract. Ultimately, it may also provide you with the peace of mind that, if a claim is made against you, you are covered for the costs of defending it.
At Hiscox we offer comprehensive business insurance for contractors, including public liability and professional indemnity cover, to protect you from claims of injury, damage, professional negligence and more.
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