About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.


Learn more about the risks covered by general liability insurance.

Example 1: A potential client is visiting your facility to discuss business. You are taking her on a short tour to show her your staff and the capabilities of your team when she trips over an extension cord and breaks her wrist. The general liability insurance policy you carry will likely cover the costs of treating her injury if you file a claim with your insurer.

Example 2: You have hired a new marketing firm to build a compelling marketing campaign for your data entry business. When the ads go live, you are pleased with the response from new clients, but you also get an unwanted response from a competitor—he has decided to sue your business for using a logo too similar to his own. Fortunately, your general liability insurance policy provides coverage for legal costs related to logos, slander, and libel. It will pay for your legal defense as well as the cost of any settlement that you may wind up paying.

Example 3:  One of your IT team members is transporting a stack of old equipment out of your office for recycling. He cannot see over the equipment very well and accidentally runs into a customer entering your office. The customer falls backward, striking his head and suffering a concussion. The customer hires an attorney and files a lawsuit against your business. The general liability insurance policy you have will pay for your legal defense fees. It will also pay for any payouts or settlements should they be required to settle the case out of court.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost Of General Liability Insurance

The average data entry business in America spends between $400-$700 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Other Types Of Coverage Data Entry Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all data entry businesses should obtain:

Workers’ Compensation Insurance

In the majority of states, a workers’ compensation policy is required for employers. But carrying workers’ comp insurance is beneficial for more than just meeting your legal obligations. Your policy allows you to take care of your employees if they are injured performing a work-related task. For instance, if an employee gets carpal tunnel from data entry, your policy would pay for his medical treatment and help cover the cost of lost wages while he recovers.

Commercial Property Insurance

The data entry equipment you have in your place of business, including computers, laptops, servers, and networking components, would be costly to replace were it to be damaged or destroyed. Commercial property insurance will help you pay for the replacement of your commercial property, like your computer equipment, in the event of a loss caused by a fire or other covered disasters.

Types Of Coverage Some Data Entry Businesses May Need

In addition to the policies outlined above, there are a few other types of coverage your data entry business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Professional Liability Insurance

The data entry work you do for various clients may need to be covered against claims of negligence, like mistakes or a failure to perform. A professional liability insurance policy will provide that protection. Should a client decide to sue your company due to mistakes you made in data entry, a professional liability insurance policy designed for your business will help to protect you—covering the cost of your legal fees, settlements, and other related expenses.

Data Breach Insurance

Also known as cyber attack insurance, data breach insurance could be important if your business is compromised by cybercriminals. For example, if a hacker stole customer information and some of those customers filed a lawsuit against your business, your data breach insurance would pay for your legal fees related to the lawsuit. Coverage would also include paying any settlements required to settle the case outside of court.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.