General liability insurance is a commercial policy that provides coverage against liability claims resulting from:
- Bodily injury
- Property damage
- Personal liabilities like defamation, wrongful detention, and copyright infringement
- Advertising liabilities
If a customer is injured on your premises, the policy can pay for their medical costs. It can also cover compensation for property damages, legal settlements, and defense fees.
Cost of General Liability Insurance in NC
Typically, LLCs pay between $300 to $1000 for general liability insurance each year. However, coverage costs can vary based on factors, including:
- Business location
- Risk exposure
- Workforce size (payroll amount)
- Deductible amount
- Limits (coverage per incident and total coverage for the policy period)
You can lower your insurance premiums by implementing proper strategies to lower your risk exposure. For an accurate assessment of your coverage needs and costs, request a quote from an insurance agent.
Benefits of General Liability Insurance for an LLC
Investing in a general liability policy is crucial for asset protection and loss prevention when your LLC is liable to pay a claim. However, it offers a lot more perks for an LLC, including:
- Shows that you are a secure and established company: When wooing clients, you do your best to win their confidence to do business with you. One way you can accomplish that is by handing them proof of liability insurance showing that you’re consistently protecting their assets.
- Demonstrates that you care about your staff: Your employees work with peace of mind knowing that they and their work are protected by insurance.
- Helps you gain more contracts: Prospective clients may require you to carry commercial liability insurance to giving you contract jobs. This minimizes their liability exposure while doing business with you, encouraging them to sign a contract with you.
When Should an LLC Purchase General Liability Insurance?
General liability insurance is a worthwhile investment if your LLC owns valuable assets like real estate. Like most businesses, you’ll probably not incur more than $1,000 per year in coverage costs. The cost of liability claims and legal defense fees can run into tens or hundreds of thousands of dollars, and insurance premiums are a small price to pay for this protection.
Risks Not Covered by General Liability Insurance
General liability policies don’t cover all risks that come with operating an LLC. You may need other insurance policies for specific types of liability exposures that your company faces day-to-day. General liability doesn’t typically cover the following risks:
- Intentional injury/damages
- Warranties your company offers
- Errors & omissions causing damage to clients (this is covered by professional liability insurance)
- Compensation to employees injured at work (workers’ compensation insurance covers this risk)
- Damage to your business properties caused by hazards like fire or storm (get commercial property insurance for this)
- Coverage for business-owned or operated vehicles (commercial auto policies cover this risk)
- Liability claims exceeding the limits on your standard policy (for this, you will need umbrella liability insurance)
Involve your insurance agent in assessing your LLC’s specific liability risks. They can help you eliminate coverage gaps and provide maximum protection for your business assets.
When forming your LLC, incorporate general liability insurance in your risk management strategy to protect your business from potentially devastating financial losses occasioned by liability claims. Contact our experts at Pittman Insurance Group, LLC today to learn more about general liability insurance in NC!