General Liability Insurance California: The Ultimate Guide
Running a business in California or anywhere else on the planet means having more responsibilities because, aside from their company’s daily operations, business owners also have an obligation on anyone they are working with, whether it is a client, a visitor, or a subcontractor.
And because just about anything may happen in your place of business, you need to ensure that you’re one step ahead by purchasing business insurance such as general liability insurance, workers’ compensation insurance, commercial auto insurance, or any other type of commercial insurance that will give protection and coverage against any potential risks.
Whether you are operating a small business or a big one in California, business owners need to secure themselves from any business liability that they could face. This can be done by getting liability coverage and getting the maximum protection for their company and their assets.
Though general liability insurance or what is also known as commercial general liability insurance or business liability insurance is not required in the state of California, as a business owner, you know that you still need some business insurance to give you some liability coverage if an unexpected situation occurs while a third party is in your place of business. Here’s everything you should know about general liability insurance in California.
Commercial General Liability Insurance California Requirements
Here are insurance policies that are required by the law everywhere in California:
- Workers’ Comp Insurance: According to California state law, businesses with employees, full-time or part-time, must carry workers’ comp insurance. This insurance policy covers medical bills for work injuries and illnesses.
- Commercial Auto Insurance: In California, all business-owned vehicles must be covered by commercial auto insurance. Minimum liability insurance in California is $5,000 property damage liability per accident. Trucking companies may require additional coverage to comply with the law.
The law doesn’t require general liability insurance in California, but it is recommended as it can protect your business from the devastating costs of large liability claims.
How Much Does General Liability Insurance in California Cost?
In California, the median cost for insurance with business liability is around $27 per month.
Insurance companies have several options for this kind of general insurance. The actual amount may differ because of many different factors, including the kind of business you have and the products or goods you manufacture.
The final amount for insurance from the general coverage policy may also be based on the classification system for the general liability or GL rating of the insurance companies or the SIC code. However, for a company with a higher risk, or if your business is the type where you need to have a high amount of public interaction, increasing your coverage policy may be a wise thing to consider.
California courts are known for awarding huge liability rewards, which is another good reason you need to get general liability insurance even when it is not mandatory in this state. Having insurance by the general policy is essential in California. After all, it would be very costly to have the mistake of not having any business liability insurance because it only takes a single big claim, and you could easily be out of business.
The cost of California business liability insurance depends on:
- The industry
- Business operations
- Location
- Number of employees
- Policy limits
- Deductibles
What is the Policy Coverage for General Liability Insurance?
Most especially, small businesses should have this type of commercial insurance so you can protect your company and your assets from risks such as property damage, bodily injury, personal injury, or reputation damage through libel or slander from a third party.
To get the best coverage for your insurance policy in California, it is best to reach out to an insurance company you can trust. These insurance specialists are highly trained to offer help by making it easier and simpler for company owners to choose the kind of business insurance that matches their business well.
After deciding which insurance company in California, you will get your business insurance from. Next is to search for a highly qualified broker-representative to help you find the perfect liability insurance for your business. It is important that you first check if the representative is licensed by the CDI (California’s Department of Insurance). Another requirement of the California law is that the representative’s license must be displayed in their office at the insurance company they are working for. Their license number must be printed on their company cards.
This general liability insurance intends to protect owners from indirect or direct damages caused by the business’s action to a third party such as subcontractors, visitors, or clients. This type of liability insurance will pay for property damage or bodily injury, etc. that occurred while a third party is in your place of business. In California, owners can choose their policy limits as well as their deductibles in their insurance coverage.
The three main types for insurance coverage are:
- Premises Liability: which offers protection for bodily injury or property damage that happened within your workplace
- Products Liability: which is designed to protect from any hazard that may occur from your products or goods
- Completed Operations: This gives protection to your business in case a liability arises from a finished work.
Usually, part of the coverage from a general liability policy is medical expenses and defense fees in the event of a lawsuit.
What Doesn’t General Liability Insurance in California Cover?
Here’s what’s not a part of liability insurance in California:
- Employee injuries
- Workers’ compensation
- Damages due to professional service
- Disclosure of personal information
- Damage to the equipment or property, including transportations that are owned by your business
- Claims already known before the commencement of the policy
- The work you did before the start of the policy
For those that are not covered by your policy, you may simply add commercial insurance or commercial auto insurance, etc.
How are Premiums Assessed?
If you are not sure how your premiums will be assessed, the insurance company will give you more information and details about it. But to have an idea, the amount you need to pay for your general liability insurance will be based on factors such as the kind of products or services you offer, the number of years you are operating, the number of employees, and even your claims history.
Suppose you are operating from home and have renter’s insurance or homeowner’s insurance. In that case, it is important to know that these kinds of liability insurances have limited coverages, so they are not enough to cover your losses.
Before starting your operations in California, know the general rules for businesses, and find out which are mandatory and which are optional. Some of the ones required by the state are disability, automobile, and workers’ compensation insurances. Simultaneously, those that are optional are BOP, product liability, errors and omissions, employment practices liability, etc.
An insurance company can guide you about the best general liability insurance for your firm and your industry. Getting this type of protection will surely give you a lot of help because you can simply focus on making your business grow. Having a general liability policy can protect you from whatever claims or lawsuits a third party makes against you.
What Business Insurance is Required by Law in California?
According to California state law, business owners are required to have workers’ comp and commercial auto insurance.
Who Needs General Liability Insurance?
Whether you are a retailer or a wholesaler, an owner of a restaurant, liquor store, kiosk, or concession stands, or you operate a child care center, whatever industry or profession you are in, you need general liability insurance to save you from the risk of experiencing financial losses as a consequence of an uneventful claim or lawsuit.
Having protection such as the general liability policy is something that you should never neglect when operating a company because it will give you huge savings in cases of claims. Be sure to talk to a broker-representative who is highly knowledgeable of general liability insurance.
What if My Industry Isn’t Listed in the Most Common Industries That Need General Liability?
Any business, regardless of its size, industry, niche or location should take steps to protect itself from unforeseen situations. Depending on the type of coverage that you need, it is always recommended to talk to an experienced insurance specialist and choose the policy that will suit your specific needs.
Is Commercial General Liability Insurance Required in California?
General liability insurance isn’t required by the law in California but it is recommended as a good way to protect your most valuable business assets.
Why Would you Need General Liability Insurance in California?
General liability insurance in California covers you and your business for claims that involve property damage or bodily injuries that result from your business operations.
Are you still confused about general liability insurance in California, or do you need some help getting a quote for your business? Contact us today and get all the information you need fast and for free!
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