Every business owner in Massachusetts needs to invest in a general liability insurance policy. This coverage protects the business owner from a variety of claims, including property damage claims. Claims resulting from personal injury, bodily injury, and advertising injury fall under this category, and any claim against a business jeopardizes the hard work and money the owner has put into this venture. Furthermore, claims of this sort damage the business reputation if not handled properly. As a result, each business owner must make certain they have coverage to fight any claims and protect their good name.
What Does a General Liability Insurance Policy Cover?
Owning a business comes with risks. Fortunately, entrepreneurs find they can get protection against many of these risks, including those known and unknown. What does this policy cover? The following material provides a general overview of this policy, and business owners can get more information if they desire.
Bodily injury and property damage claims remain a concern of every business owner, as a person might sue for a slip-and-fall accident or allege financial loss because of property damage. The policy covers damages incurred if the alleged victim’s claim succeeds.
Mistakes happen, regardless of how much a person works to prevent them. A business might find they are being sued because of an advertising error. Someone might claim that this advertising infringed on their copyright, and the business owner must mount a defense against this claim. The policy helps to cover the costs of doing so and any award granted to the party suing.
Individuals might claim a business committed slander or libel, and the business owner must defend against this claim as well. The same holds true for wrongful eviction claims, those involving a violation of a person’s privacy rights, or a malicious prosecution claim. All claims harm the reputation of a business, which is why insurance companies now cover reputational harm in many insurance policies. Business owners need to read the fine print of any policy they are considering and learn about exclusions.
Insurers cover damage to premises a business owner is renting or leasing. For instance, a business hit by lighting or damaged by fire must rebuild. The insurance covers any damage that occurred to the structure, so the business operator doesn’t have to worry about this aspect of the disaster.
When a person claims they sustained an injury on the premises of a business, the owner might find they are responsible for any medical bills associated with this injury. A general liability policy often offers protection against this claim. The policy covers the medical bills so the business owner doesn’t have to.
Furthermore, certain clients require businesses they work with to agree to maintaining general liability protection before they work together. The insurance policy fulfills this agreement, allowing the business to take on more work.
The Cost of General Liability Protection
Business owners often worry about the cost of general liability insurance coverage in Massachusetts. They want an idea of how much this protection will cost them. What they must realize is several factors play a role in the cost, such as the type of business being covered, where the business is located, and the risk level the business is exposed to. For instance, those working in the construction industry take on more risk than a data analyst working behind a desk. The insurer takes this into consideration when calculating the premium.
Does Your Business Need a General Liability Insurance Policy?
Small business owners often put their life savings into their venture. Without general liability protection, one lawsuit could lead to the business closing its doors forever. No business owner should risk their venture by failing to get this protection. Construction companies must protect themselves, as this industry remains fraught with danger, and home improvement providers need to do the same. For instance, a company that offers dryer vent cleaning might feel they need not spend the money on this policy because they don’t have a dangerous job. They only learn how wrong they were when someone files a lawsuit that threatens their entire organization.
Commercial property companies, professional services, and advertising or marketing companies need to get this protection along with those in real estate and retail. Auto repair providers and any business operating in the health and beauty industry need to spend the money to ensure they remain covered along with those working in information technology. In fact, every business across the state should get a general liability insurance policy.
If there is any doubt whether you need general liability protection, speak to your financial advisor. The majority of individuals offering this advice recommend obtaining this protection. They can also provide information on other policies that may be needed if you plan to set up shop in the state.
Massachusetts Insurance Requirements
Business owners must know what the state requires in terms of insurance before opening their doors to customers. Fortunately, Massachusetts mandates little in terms of insurance coverage, leaving it up to business owners to decide what they wish to purchase. Worker’s compensation, however, remains mandatory, and the Massachusetts Division of Insurance oversees policies within the state.
Any business owner employing one person must maintain worker’s compensation insurance if the worker remains employed regularly. This includes family members who work in the business, employees, immigrant employees, and those under the age of 18. Independent contractors don’t obtain coverage through worker’s compensation, but men and women working in domestic service remain protected under the law if they work 16 or more hours a week.
An entrepreneur must cover every vehicle owned by the business under a commercial auto insurance policy. However, other business insurance policies business owners should or must carry vary by the industry. If there is any confusion regarding what a business can or must carry, it’s best to speak with a licensed insurance agent in the state. They provide information about the state requirements and other policies the business owner might wish to get to ensure their insurance protects them in the event something goes wrong.