Monday, 8 August 2016

General Business Liability Insurance: How to Determine Your Coverage Need

Undoubtedly, having general business liability insurance is an excellent choice. Before you go about buying the policy, you should be able to determine how much coverage you would need. This is done to prevent getting under-insured or over-insured. In this post, we will be looking at two main things you should consider to help you determine the amount of coverage you need.

Type of Business

Since this policy is covering damages caused to third parties by you or your employees, then it would be associated with the perceived risk of your business. The type of business you are operating will go a long way in determining what amount of coverage you will need. For instance, if your business is in construction or manufacturing industry, then your perceived risk will be high than a web-based business.

Location of the Business

This too has a lot to do with how much coverage you will need. If we should consider state and city, then you should know that some States offer different policies on business perceived risks. If we are to examine location in terms of the environment where your business is situated, then there are higher perceived risks in some areas than others. If your business is located in a well secured environment, risk caused by your business to third parties will be lower than one situated in a high risk environment.

If after dutiful consideration of these factors and your business has a low risk to third parties, then you should consider getting a Business Owner Policy instead. Although it has its limits but because your perceived risk level is low, the limit should be able to cover it. Besides, it will allow your business save up on annual premium charges.

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