Running a business in Arizona comes with a lot of risks. While you may take every measure to prevent an accident from happening, you can’t always control what happens. That’s where general liability insurance comes in. General liability insurance (GL) is a type of insurance that protects your business from financial loss if a third party (such as a customer, vendor or landlord) makes a claim against your business. In this article, we’ll explore everything you need to know about general liability insurance in Arizona.
What is General Liability Insurance?
General liability insurance is a type of business insurance that provides financial protection to businesses if they are sued by a third party for property damage, bodily injury, or other damages. GL insurance covers legal fees, medical expenses, and damages awarded by a court. It’s often considered the foundation of any comprehensive business insurance policy because it provides broad coverage for common risks.
In Arizona, general liability insurance is not required by law, but it’s highly recommended. In fact, many businesses are required by their clients or landlords to carry general liability insurance before they can start working on a project or lease a commercial space.
What Does General Liability Insurance Cover?
General liability insurance covers a wide range of risks, including:
What General Liability Insurance Covers |
Examples of Claims |
|---|---|
Bodily injury |
A customer slips and falls on your premises and sustains an injury |
Property damage |
You accidentally damage a client’s property while working on their project |
Advertising injury |
You are accused of copyright infringement on a marketing campaign |
Product liability |
A customer experiences harm or injury from using your product |
It’s essential to note that general liability insurance does not cover intentional harm or illegal activities. If you intentionally harm a customer or conduct illegal activities, you’ll likely need to hire a criminal defense lawyer to protect you in court.
Types of General Liability Insurance Policies
There are two main types of general liability insurance policies:
Occurrence-Based Policies
Occurrence-based policies provide coverage for claims that occur during the policy period, regardless of when the claim is filed. For example, if a customer sues you for an injury they sustained on your premises six months ago, but your policy was active during that time, your policy will cover the claim.
Claims-Made Policies
Claims-made policies cover claims that are filed during the policy period, regardless of when the incident that led to the claim occurred. For example, if a customer sues you for an injury they sustained on your premises two years ago, and you have an active policy, your policy will cover the claim. However, if you let your policy lapse, and the customer files the claim after the policy period ends, you won’t be covered.
Most general liability insurance policies are written on an occurrence-based form, but it’s essential to understand the differences between the two types of policies before purchasing a policy.
Why Do You Need General Liability Insurance in Arizona?
In Arizona, businesses face a range of risks, including natural disasters, accidents, and other unforeseen events that can cause property damage or bodily harm to third parties. Without general liability insurance, you’ll be responsible for paying for any damages or legal fees out of pocket if a third party sues you or makes a claim against your business. This can be expensive and financially devastating for many small businesses.
General liability insurance gives you peace of mind knowing that you’re protected in case of an unexpected event. Even if you take every precaution possible to prevent an accident from happening, accidents can still happen. Having general liability insurance ensures that your business is protected financially in case of a claim or lawsuit.
How Much Does General Liability Insurance Cost in Arizona?
The cost of general liability insurance in Arizona varies depending on several factors, including:
- The type of business you operate
- The location of your business
- Your business’s annual revenue
- The amount of coverage you need
- Your business’s claims history
On average, general liability insurance in Arizona can range from $300 to $1,000 per year, depending on the factors mentioned above. It’s essential to shop around and compare quotes from multiple insurance providers to find the best policy for your business at an affordable price.
FAQ About General Liability Insurance in Arizona
What are the minimum coverage limits required for general liability insurance in Arizona?
There are no minimum coverage limits required for general liability insurance in Arizona. However, it’s recommended to carry at least $1 million in coverage for bodily injury and property damage.
Who needs general liability insurance in Arizona?
Any business that interacts with the public, has employees, or operates on leased property should carry general liability insurance in Arizona.
What is not covered by general liability insurance in Arizona?
General liability insurance does not cover intentional harm, illegal activities, or professional negligence. For these risks, you’ll need to purchase additional insurance policies, such as professional liability insurance or cyber liability insurance.
Do I need general liability insurance if I work from home in Arizona?
If you’re running a business from home, you may still need general liability insurance. If clients or vendors visit your home or if you’re conducting business activities that involve physical risk (such as product delivery), it’s important to carry general liability insurance to protect your business.
How do I choose the right general liability insurance policy for my business in Arizona?
Choosing the right general liability insurance policy depends on your business’s unique needs and risks. Factors to consider include your industry, the amount of coverage you need, and your budget. It’s important to shop around and compare quotes from multiple insurance providers to find the best policy for your business.
Can I bundle other insurance policies with my general liability insurance in Arizona?
Yes, many insurance providers offer bundled insurance policies that include general liability insurance, property insurance, and other types of coverage. Bundling your insurance policies can often save you money on premiums and make it easier to manage your policies.
Conclusion
General liability insurance is one of the most important types of insurance for businesses in Arizona. It provides financial protection from common risks, such as bodily injury, property damage, and advertising injury. By carrying general liability insurance, you can focus on running your business without worrying about unexpected events that could lead to financial loss. Contact an insurance provider today to learn more about general liability insurance options for your business.