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.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A PUBLIC RELATIONS COMPANY

Learn more about the risks covered by general liability insurance.

Example 1: When a client stops by the office to learn more about its inner workings, they trip over a purse that was left on the floor next to a desk. General liability insurance would most likely cover any medical or legal expenses related to the incident.

Example 2: A client believes your marketing to be misleading. They claim that you falsely advertise your services and decide to file a formal legal claim. General liability insurance will provide the funds you need to mount a legal defense.

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 public relations company 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 Public Relations Companies 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 public relations companies should obtain:

Commercial Property Insurance

If you own the building in which your public relations firm operates, property insurance can help cover the costs of repairs in the event of a fire or vandalism. It can also cover expenses related to replacing computers and other equipment.

Professional Liability Insurance

Because public relations can be such a subjective field, professional liability is a must for owners who want to protect themselves from a variety of different kinds of claims. Professional liability insurance covers employee mistakes or negligence claims that may arise. If a client feels as though their company was portrayed in a negative light due to the firm’s actions, you can look to professional liability insurance to cover any ensuing legal costs.

Types Of Coverage Some Public Relations Companies May Need

In addition to the policies outlined above, there are a few other types of coverage your public relations company 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.

Commercial Umbrella Insurance

Commercial umbrella insurance will go above and beyond the coverage limits of your general liability insurance. Because public relations firms can face extremely expensive lawsuits that may drag on for quite some time, commercial umbrella insurance can be extremely helpful for business owners who require extra funds to successfully defend against claims.

Workers' Compensation Insurance

Assuming your company has employees (whether full- or part-time), this policy will cover any medical expenses that result from work-related accidents or conditions. Most states legally mandate any business with employees to carry this coverage.

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.