New York City is the perfect location for small businesses. With a dense population, plenty of foot traffic, and passionate business dreamers, it’s no wonder more than 220,000 businesses call NYC home. 98% of these businesses are considered small businesses with less than 100 employees.
Surprisingly, about 40% of small businesses don’t carry any type of insurance. This means there are potentially nearly 90,000 small businesses in NYC operating without business insurance. Are you one of them?
When it comes to business insurance, a general liability policy is the first you should investigate and purchase. Whether you’re a contractor, entrepreneur, or small business owner, you’re not immune to potential disaster brought on by a lawsuit.
But how necessary is it? And what does general liability insurance cover? How much does it cost? We’ll address these questions and more in this guide to general liability insurance for small business.
Do I Need General Liability Insurance for My Business?
In fact, if you answer yes to any of these questions, you need general liability insurance for small business:
- Do you deal with customers on your property? Slips, falls, and other injuries occur every day. Is your business protected from the legal fallout when they do?
- Do you have contractors working on site? What happens if a subcontractor is injured while working on your business property?
- Do you have employees that venture out into the world to take care of business on behalf of your company? Are you covered if they trip and damage a piece of art at a client’s place of business?
- Do you have access to equipment that belongs to your clients? What happens if an employee spills coffee on a client’s laptop keyboard?
Even if none of these apply to your business, we live in an increasingly litigious society. A passerby who is injured on your business property is likely to sue – whether they are a customer of your business or not. That is why your small business needs general liability insurance for small business owners.
According to Bolt, one third of small businesses have either been sued or threatened with a lawsuit. With over 100 million cases filed every year, the risks are real. While some industries are more prevalent to lawsuits than others, if you’re a company selling something to someone, you’re at risk.
Types of General Liability Coverages Available
General liability insurance is an umbrella term that refers to a wide range of liability coverage types including the following:
Bodily Injury Coverage
This type of coverage kicks in when customers or clients are injured by your property or while on your property and sue you to help pay for their medical bills and recover some of their lost wages. General liability insurance would cover the claim and the medical expenses related to it up to your coverage amount.
For example, let’s say your women’s clothing boutique with dreams of opening up another location on Fifth Avenue has been attracting extra business lately. All the extra traffic is great for your bottom line but terrible for your floors. You add a few floor rugs to help disguise the dirt but a shopper trips on a rug and hits the edge of a display table on the way down. Having bodily injury coverage will pay for medical bills and help with litigation charges should they decide to sue, possibly saving your Fifth Avenue dream.
This is about injury to reputation more than an actual physical industry. If your employees reveal unflattering information about your clients to someone in public, your business can be held legally responsible for the actions of your employee and receive damages as a result. Your general liability policy could cover the claim up to the limits of your policy as well as your legal expenses.
To prevent personal injury suits, explain the potential damages and consequences to employees, who are typically the culprit. A high-profile New York lawyer most likely has a few local celebrity clients. Should an assistant spill the beans about a well-known client’s money problems or personal struggles, word could travel fast, affecting their reputation and livelihood. A lawsuit is probably not far behind.
This type of coverage will protect your business if you cause damage to someone else’s property. This could be at their location or when you’re in possession of something they own. Coverage will help pay to repair or replace the item.
If you’re a contractor working on renovations at a business, an accident could set back the completion timeline and end up doubling the cost of the job. Another example could include a dry cleaner given the responsibility of preserving a wedding dress. However, an employee uses the wrong cleaner on the dress and permanently stains it. Property damage insurance will at least ease the financial damage in both situations.
Data is sometimes just as if not more valuable than physical products in today’s business market. For some companies, data is their business. If your company causes data loss for another business, you could be held liable.
For example, if your server overheats, sets off the sprinklers throughout your office, and ruins three of your customer’s laptops (and all the data stored on those systems), your general liability coverage could help replace the damaged items and cover your liability up to the coverage amount.
How Much Does General Liability Insurance for Small Business Cost?
There’s really no average number we can give you here. An annual policy premium will depend on a number of factors so it’s best to get a few liability insurance quotes for small business and compare coverage and rates. What it really comes down to the risk your type of business possesses. Here a couple sample scenarios to consider.
- A sole proprietor working out of their home selling electronic books poses much less of a risk than other industries. They may pay somewhere in the ballpark of $500 per year for general liability insurance. The same type of business, but with a small team of employees, may pay closer to $2,500 per year.
- A window washing company poses more liability risk to an insurance company. There’s more chance for injury and damage to a customer’s property. Adequate general liability insurance for such a company could cost near $20,000 per year, depending on their exact services, number of employees, and annual revenue.
Something else to consider when it comes to the cost of general liability insurance is the possibility of combining policies and saving on premiums. If you need other types of business insurance, like workers’ compensation insurance or errors and omissions insurance, bundling packages could save you a bit on your premiums.
Because we work with so many top insurance service providers, we can find the right amount of coverage at the right price to meet your small business needs and your business budget.