General Liability Insurance In California: Minimize Risk Of Lawsuits With Your CA Business Insurance
General liability insurance in California is required by the state to obtain business permits. General liability insurance for Californian businesses protects from damages caused to 3rd parties such as visitors, clients, and business partners. Liability insurance covers the financial responsibility of a business for causing damage even if an employee is held responsible.
- CA-based businesses must have a minimal degree of coverage. If you took out ‘Business Owners Insurance’, you may have a basic level of liability insurance. To increase the coverage, purchase a separate ‘General Liability Insurance’ policy.
Business owners can purchase BOP bundles or “General Liability Insurance” for more coverage. Liability insurance policies in California can prepare your business for unpredictable accidents because the cost of injuries inflicted on others could amount to millions of dollars. Liability covers business owners for property damage, medical payments, legal defense, and more.
Cheap Liability Insurance CA: Is It Possible?
The short answer: Yes. It’s possible to get CA liability insurance at a low cost if you have a small business to insure. There are factors the insurance company uses to calculate how much you owe in payments to the company. Insurance premiums are the sum of upfront costs you have to pay annually or monthly.
Deductibles are the expenses you pay out of pocket when you make a claim. For instance, if you have to make a claim for $500,000 and your deductible is $10,000 – the insurance company pays $490,000. The deductible amount is capped in order to prevent insurance clients from overpaying.
- Average Premium Price
The premium price for small businesses in California ranges between $500-5000 – this covers a broad spectrum of liability policies. Low-risk businesses that have been in business for years and have zero lawsuits may even pay less than $500 a year for liability. This is less than $50 per month in payments.
As the risk increases, the price is adjusted accordingly. In high-risk businesses such as tech companies, law firms, general contractors, weapons manufacturers, etc, the insurer may allow a client multiple lawsuits per year based on their requirements.
Liability Insurance CA: How Is Your Business Covered?
Commercial liability allows you to cover your business for all possible liability. This is a broad policy that encompasses all possible accidents. This policy is ideal for businesses that interact with the public such as restaurants, retail stores, bars, coffee shops, etc. Businesses get the following coverage:
- Property Damage/Injury. The most common reason for lawsuits are slip and fall accidents if visitors fall on the premise of your business establishment. This is covered under bodily injury, ensuring that every visitor on your business property is covered. The business is insured for all property damages the employees cause. If an employee runs into a fence with the company car, the plan will cover the repair costs of the fence.
- Advertising Damage. If an advertising campaign released by your marketing team causes revenue loss for a competitor, they could press charges. The coverage includes your defense preparation for the lawsuit and injuries related to their estimated loss of earnings/total damages.
- Medical Payments. This policy insures people who suffer injuries at your business establishment (regardless of fault) or elsewhere as a result of your products. If a visitor slips and breaks a leg at your lobby, this policy will cover their rehabilitation costs.
Liability Insurance CA: Customize Your Policy
Businesses can customize insurance coverage to get the coverage limits they need. If your current limits are capped at $1M, you could raise it a total of $2M and add inclusions based on your individual business needs. Policy options are available for businesses such as manufacturers, hospitals, IT start-ups, grocery stores, retail stores, coffee shops, and more.
Example: If you’re a hotel business that serves clients in a restaurant and has a large garage with a valet service, you can purchase policies such as “Garage Liability” and “Alcohol Liability” which are specific to your industry.
Hotels will need garage liability to protect the client’s cars while they’re parked, and they may also need alcohol liability for bars/restaurants a client over-drinks and ends up in the hospital. The same business can add these to their general insurance policy.
Liability Insurance California: Umbrella Options
Businesses can get umbrella business insurance which provides high liability coverage and personal protection. The downside of General Liability policies is that they only insure 3rd party persons – that is visitors, clients, business partners – anyone but you.
If you purchase umbrella coverage, you can insure your business for the coverage you need and allocate the rest on liability insurance. For instance, if the equipment in your business is worth $250,000, you only need $250-500K in business insurance. You can then purchase liability insurance for $1-2M in coverage in order to protect the business from lawsuits.
If your business employs a lot of personnel and has a fleet of vehicles, you can expand your policy by purchasing commercial automotive insurance for each vehicle belonging to your business. This provides liability coverage for all accidents caused by your employees on the road.
Liability Insurance In California: 3 Ways To Lower Premiums
There are ways to lower your annual premiums. The average CA-based business pays slightly over $700 a year in liability insurance. This totals out to less than $70 a month. To lower your liability insurance payments, consider the following measures:
1) Bundle Insurance. If you purchase multiple insurance policies at once, you can save on the total costs. Insurers provide discounts for businesses that bundle their insurance policies from them. For instance, the BOP policy is the most popular policy for business insurance in California. If you combine a BOP policy with General Liability Insurance, you can get a discount from your insurer.
2) Pay Upfront. If you want to pay less, you can pay the entire premium upfront. Insurers will give you the option to pay a year upfront or pay in monthly installments. If you choose monthly payments, you’ll pay more at the end of the. Businesses who pay their premiums in advance get discounts.
3) Lower Risks. High-risk companies pay more premiums, especially if they have a history of claims. There are ways to lower your costs even if you’ve had liability insurance claims in the past. Here are the top ways to lower your existing premiums:
- Upgrade your security system to the latest standards.
- Invest in safe floors to minimize slip and fall accidents.
- Train your employees to care for clients.
- Upgrade your equipment to minimize hazards and professional malpractice.
- Create rules for advertising and social media posts to prevent slander.