While the Aloha State shares many of the same risks as other U.S. states, it also has unique hazards, such as recurrent earthquakes and frequent, long-lasting volcanic eruptions. While general liability insurance does not protect against every risk, it can help preserve business assets by covering damages, legal costs, and settlements up to the limit on the policy for covered claims.
Learn more about general liability coverage and why general liability insurance in Hawaii is a must-have for local business owners.
What Does General Liability Insurance Cover?
General liability is one of the most important types of insurance that a Hawaii business owner can carry. Also referred to as business liability insurance, this policy is designed to protect businesses from “general” claims involving property damage or bodily injury.
General liability insurance can also help cover attorney fees and medical expenses that stem from property damage or bodily injuries for which the business may be deemed liable.
Why Do Hawaii Businesses Need General Liability Insurance?
With general liability insurance, Hawaii businesses can safeguard their investment from a variety of liability risks. General liability policies provide financial protection if a third party, such as a client, customer, or vendor, brings a claim against the business for property damage or injuries sustained due to the business’s products, services, or operations.
Some of the top reasons that nearly every Hawaii business needs general liability include:
1. Protect Against Third-Party Injuries
General liability insurance provides businesses with protection against third-party accidents and injuries. While general liability policies do not provide coverage for owners or employees, they do cover other guests who may become injured on the premises, such as customers, vendors, delivery drivers, mail delivery people, or utility workers.
2. Protect Against Third-Party Property Damage
In addition to covering third-party injuries, general liability protects against third-party property damage. General liability policies can protect a business from financial loss if it should be deemed liable for property damage caused by business operations, services, or employees.
3. Build Credibility in Your Industry
Having business insurance policies such as general liability does more than protect your company from third-party injuries and property damage.
Carrying comprehensive policies also shows contractors and customers that the business takes risk management seriously. General liability insurance helps communicate that the business is willing to invest in the proper protection to safeguard against all types of accidents.
4. Handle Costly Legal Expenses
While some business owners shy away from the cost of business insurance, the amount a business will ultimately save when a lawsuit arises far surpasses the cost of premiums.
According to the U.S. Chamber of Commerce, the average U.S. business spends approximately $1.2 million each year fighting litigation. General liability insurance can help cover attorney fees, settlements, and other costly legal expenses.
5. Meet Contract Requirements
Businesses often enter into contracts with other organizations. While these contracts can be profitable, they pose specific risks for either party. To protect against these risks, one party may require the other to comply with certain requirements laid out in the contract. To meet these contract requirements, a business may need to carry business insurance, such as a general liability policy.
6. Cover Common Business Mistakes
Despite a business’s best efforts to never make errors, mistakes can and do happen. General liability insurance offers a variety of protections, including covering damages caused by the business’s mistakes.
For example, suppose food is mishandled by a restaurant employee, causing a customer to become seriously ill. In that case, a claim may be filed against the business.
General liability insurance can help keep a company in business as it recovers from its mistake.
7. Gain Approval for Leased Commercial Spaces
Many businesses choose to rent commercial spaces to operate their organization. Unfortunately, commercial property owners are often hesitant to rent these spaces to business owners without the proper protections.
Some landlords will require their tenants to provide proof of general liability insurance and possibly other business policies before renting out a commercial space.
8. Maintain Peace of Mind
Worrying about what could happen to a business can be stressful, especially for new business owners. Having the right business policies can give Hawaii business owners peace of mind as they establish and grow their organizations. Nearly every business in every industry can benefit from obtaining a general liability insurance policy.
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Whether a person is freelancing to earn extra income, launching an exciting startup, or expanding their established company, general liability insurance can help protect their assets and safeguard against unexpected liability risks.