What Is The Minimum Insurance Coverage A Small Business Should Have?

For a small-to-medium sized business to properly guard its assets, commercial general liability insurance is often considered the minimum, and in some cases, the only coverage the company needs. Larger firms with several physical locations, more employees and higher revenues, generally require additional coverage on specific assets but, for the majority of small business owners, the standard CGL (commercial general liability policy) is an all-in-one package offering suitable levels of coverage at an affordable price.

What Does A Standard CGL Cover?

As most claims filed against businesses belong to one of four categories (bodily injury, personal injury, advertising injury and damage to property), the typical CGL concentrates on supplying the maximum level of coverage at the lowest price in these areas of liability. The reasoning behind this strategy is to provide the consumer with the most-comprehensive business insurance protection possible, at a cost below what would be paid if he or she were to buy each of the four policies separately.

What Amount Of Coverage Is Provided By A CGL?

There can be aspects of certain small businesses which require additional coverage beyond what is offered by a CGL, but the standard coverage provided against the aforementioned ?big four? liabilities is usually sufficient for most ventures. While the exact amount covered by each policy could vary greatly, as a basic rule of thumb, all commercial general liability insurance plans cover the fees associated with defending and settling against a covered claim. If the particulars of your business open you up to the possibility for extremely large judgments against your company, you should consider supplementing your CGL with an umbrella policy.

What?s An Umbrella Policy?

?Umbrella policy? is the name given to any type of supplemental insurance which offers a specified monetary level of coverage above and beyond what is written into the base policy. Basically, the umbrella policy is used to protect you against legal fees and judgments that exceed your standard general liability insurance plan?s limits.

Not every small business needs an umbrella policy, but given their relatively low price and great potential value, these types of policies are usually worth having anyways. The sum of additional monetary coverage provided by umbrella insurance can be adjusted to fit your business? unique profile along with your budget.

Summing Up The Benefits Of A CGL

Definitely, the biggest advantage to a CGL is that it allows the customer to buy the four essential forms of insurance for small businesses at an affordable price. Despite its lower price tag, the level of coverage provided against bodily injury, personal injury, advertising injury and property damage claims is also usually sufficient for the majority of business owners.

In light of the numerous advantages to buying commercial general liability insurance instead of multiple, smaller policies individually, most insurance experts recommend it as the one ?essential? insurance for new businesses. Therefore, it is easy to get a package with high limits at a cost that will fit easily within your company?s budget.

If you?d like to find out more about commercial general liability insurance, check out Darin Mendanor?s other articles on topics ranging from how to find the best prices on general liability insurance, and make sure that your insurance company is reliable.

Source: http://www.eddyarticles.com/finance/what-is-the-minimum-insurance-coverage-a-small-business-should-have/

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