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.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A TECH SUPPORT BUSINESS
Example 1: While visiting the office, a client trips over a cord and injures herself. General liability insurance would cover her medical bills.
Example 2: An employee tweets about how difficult one of your clients is to work with. The client sees the post, knows it is about him, and sues your business for defamation. Your general liability policy would cover the cost of legal representation, as well as any court-awarded damages.
Example 3: During a presentation to a potential new customer, you accidentally spill your coffee, destroying his expensive laptop. He is suing your business to replace the laptop. General liability insurance would cover the cost to replace the client’s ruined equipment.
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
On average, tech support businesses in America spend between $350 - $900 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:
Several factors will determine the price of your policy. These include your:
- 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.
Other Types of Coverage tech support 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 tech support businesses should obtain:
Professional Liability Insurance
Without the addition of professional liability insurance, lawsuits stemming from your work, such as project delays, coding errors, and computer glitches, will not be covered. Also known as Errors and Omissions (E & O) insurance, this policy covers the cost of legal representation and court-awarded damages if your professional actions result in a loss for one of your customers.
Commercial Property Insurance
Commercial property insurance covers the cost to repair or replace business-owned assets, including owned physical property and/or contents stored onsite. If your commercial property is damaged in a covered event such as a natural disaster, fire, or theft, this policy will help you repair or replace your property so you can get back to work.
Workers’ Compensation Insurance
Businesses with full-time and part-time employees are required by state law to carry workers compensation insurance. Its purpose is to provide medical coverage for on-the-job illness and injury. In the event of a more serious incident, the company will be provided legal representation and cover court-awarded damages up to the limits of the policy.
Types of Coverage Some tech support businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your tech support 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.
Data Breach Insurance (aka Cyber Attack insurance)
Working in tech support means you rely heavily on technology for most aspects of the business. Unfortunately, this also makes you vulnerable to online hackers, a loss that is specifically excluded on a general liability policy. Data breach insurance fills that coverage gap, paying damages from a data breach that results in stolen user data.
Commercial Umbrella Liability Insurance
Like many professions, your work exposes you to many liability risks. For larger insurance claims, your underlying general liability policy limits may be exhausted before the claim is settled. A commercial umbrella policy acts as an additional layer of protection, picking up where the your general liability policy leaves off.
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.
Frequently Asked Questions
What is included in a business owner’s policy?
A typical business owner's policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company's needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it's best to be proactive when it comes to protecting your assets. After all, you can't buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.