How Much General Liability Coverage Do You Need?

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By RANDY PERSAD

You know you need liability insurance to protect your company from lawsuits arising from injuries or property damage as a result of your own direct or indirect actions. But do you really have a good grasp on just how much coverage you need? Your commercial insurance package policy probably came with a base level of general liability coverage; in most cases, increasing that coverage is more than just a good idea, it is a must.

Lawsuits Are A Reality

You have probably heard about million-dollar lawsuits brought against major companies by people who were injured as a result of negligence. You may even have thought some of those lawsuits were frivolous and unfounded, but the fact that you heard about them probably indicates they went to court. And if they went to court, those companies were forced to defend against them, spending a lot of money on legal fees. Do you have enough coverage to handle those legal fees, and also pay out a settlement if your day in court goes against you?

Many small businesses believe that they will not be the target of such a high dollar lawsuit because they aren’t big names. This thinking is dangerous; while some people may increase the dollar amount of their lawsuit when they know a company can pay, large lawsuits are still often brought against smaller companies. And smaller companies are the least able to absorb the loss if they are forced to fight a court battle and pay out on a settlement. Which is why these companies really do need much more liability coverage than they may believe.

Carrying Enough Coverage

General liability insurance covers you for a wide variety of potential negligence situations, and it is actually one of the less expensive coverages for most companies. When it comes to determining how much you need, the simple rule is that more is better. If the option is there to increase the coverage and it doesn’t make a large difference in your premium, you should always take it.

The cost of a liability claim can rise quickly, and if your coverage limits are met you will be left to pay any remaining costs yourself. If you have ever been involved in a lawsuit you know how expensive lawyers and court costs can be. Add to that the amount that a judge may award the claimant and you are looking at a serious financial loss. General liability insurance is the simple and affordable way to make sure this doesn’t happen; talk to your insurance agent to be sure you are carrying enough and increase it if you can. When it comes to liability, better safe than sorry is always the right way to go.

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Randy Persad is an Insurance Advisor with UG Insurance. Email your questions to randy@uginsurance.com or text them to 212-470-5189. You can also call 718-848-7777 to book an appointment for a free Insurance Review with Randy.

The views expressed in this column are solely those of the writer and do not necessarily represent the views of the THE WEST INDIAN.

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