As a small business owner or an entrepreneur launching a startup, where does protecting your company from risk rank on your list of priorities?

It should be a key consideration and a significant portion of your overall risk management strategy, and a comprehensive business insurance policy is the foundation of that strategy. Because let’s face it, there are downsides to owning a business. Any number of things can go sideways unexpectedly, and as the business owner, the onus is on you to deal with those situations, such as:

  • A customer or delivery person visiting your store or office stumbles over uneven carpeting or flooring and tumbles to the ground. They fracture a wrist or ankle and demand you pay for their medical expenses.
  • In the middle of the night, your shop is burglarized, and office equipment, electronics, and merchandise are stolen.
  • A sudden and violent windstorm descends on your community and severely damages the roof of your warehouse.
  • One of your employees doing some form or installation work inside a customer’s home or while making a delivery accidentally damages expensive furniture.
A man wondering about his insurance needs

Different types of insurance coverages exist for each scenario above to provide protection or financial support for such possibilities. Among them are premises liability and general liability insurance. Are they the same? How do you know which one you need? Do you need both?

Breaking down what each coverage is designed to do can help you determine what you need to ensure your small business is adequately protected. So, let’s do that:

What Is Premises Liability Insurance?

Although there may be some overlap between the two, premises liability insurance is not the same as general liability insurance. 

Sometimes referred to as basic liability, premises liability insurance provides you with financial support for accidents that take place on a commercial property or at a home-based business. In either scenario, think of the areas where you and your staff work, including:

  • An office, studio, warehouse, or retail store
  • The walkway and entrances to your business property
  • The land around your business property
  • The driveway and parking lot at your property

Premises liability covers third-party damages or injuries on your commercial or business property. It is limited in scope but may provide a higher amount of coverage than general liability insurance.

What Is General Liability Insurance?

General liability insurance, or commercial general liability insurance, covers third-party bodily injury or damage to someone else’s property because of your products or services.

It’s a more comprehensive policy which includes premises liability and a host of other protections such as product liability insurance, personal injury liability, and tenants’ legal liability. It also costs more than a premises liability policy. Furthermore, it provides financial support if you are sued for damages by paying for your legal fees and any out-of-court settlement or compensation awarded to the plaintiff by the court.

How Does Premises Liability and General Liability Cover Shared Properties?

If you are a tenant of an office building or a retail plaza and don’t own the commercial space where your business operates, you still need to carry either premises liability or general liability insurance.

Although your landlord may be responsible for maintaining common areas of a shared property, such as lobbies, corridors, walkways, and entrances, check the terms of your lease to be sure.

It’s also worthwhile to get a free liability insurance quote from Zensurance by filling out an online application about your business. Our licensed brokers will shop our partner network of more than 50 insurers to find the policy that suits your needs best, and they can address any questions you have to ensure you’re protected.

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