General liability insurance is one of the most common and important forms of liability insurance for businesses, as it covers accidents that businesses face on a day to day basis. Specifically, such a policy can provide protection against the resulting expenses if your business is held responsible for injuring a third party or damaging their property.
To purchase general liability insurance, you need to provide the right information to your insurer, including the following:
· Name of the business
· Annual revenue
· Number of employees
· Claims history
· Desired coverage
Keep in mind that this list is not exhaustive. In some cases, your insurer may require additional information.
Why Is This Information Important?
Insurance providers primarily need this information to calculate how much coverage you will need and what your premiums will be. Various factors affect your general liability insurance needs and costs.
Different industries provide different levels of risk when it comes to general liability claims. A retail business may face less overall risk than a hospital, for example. The higher your business’s risk of needing to file a general liability insurance claim, the more you may pay for higher limits of general liability insurance.
Annual Revenue and Number of Employees
Insurers will want to know the size of your business in terms of your annual revenue and number of employees. This can help determine whether your business falls into the small business category or large business category, although this can also be influenced by your industry.
Larger businesses, especially those with multiple locations, will generally need higher limits of general liability insurance. This also affects the type of policy you can purchase. A business owners policy (BOP), for example, combines general liability and commercial property insurance within a singular package—but BOPs are usually only available for small businesses in low-risk industries.
An insurance provider will want to know if your business has faced a general liability claim in the past, as well as how many. Having a lot of past claims can tell the insurance provider that you are at risk for facing more claims in the future, which could cost them money. This generally leads to higher premiums for your general liability insurance policy.
You don’t always need to know what coverage you want when applying for a quote, but it helps to understand the risks of your business and approximately how much coverage you need. No two businesses are the same and you will want to work with an insurance agent who understands the risks your business faces so that you can get the policy suited with the right protection.
Contact your insurance agent for more information.