What is Commercial General Liability Insurance and What Does it Have to Do with a Surety Bond?

Discover what is a surety bond, why general liability insurance is so important, and how they work together for your small business.

Peanut butter and jelly. 
Chips and salsa. 
General liability insurance and surety bonds.

What do these all have in common? They’re dynamic duos! Two peas in a pod. Two sides of the same coin. Can we get any mac and cheesy-er? Probably. None of these things would be the same without the other. You can’t eat salsa without chips. Jelly sandwiches just aren’t the same without peanut butter. And as a contractor, you can’t start your business without general liability insurance and surety bonds (also known as contractor’s bonds).  

What is General Liability Insurance for Small Business

If you’re asking what general liability insurance is, you’re not alone. And you’re in the right spot! General liability insurance is an important part of your business’s insurance plan. It covers claims that say your business caused bodily injury or property damage. It provides the cushion your business needs to cover the cost of these claims so you don’t pay for it out of your own pocket.

General Liability Insurance Coverage

General Liability Insurances covers the following types of costly claims:

• Bodily Injury

Covers claims where a customer is injured at your business. The policy would help your customer pay incurred medical bills.

• Property Damage

Covers claims where employees damage customers property while working, either via delivery or through services. The policy would help pay to replace damaged items.

• Reputational Harm

Covers claims that include false accusations, malicious prosecution, privacy violations, and more. The policy would help cover legal fees.

• Advertising Injuries

Covers claims surrounding copyright infringement. The policy would help to cover legal fees.

• Damage to properties you rent

Covers claims where properties your business rents get damaged. The policy would cover things like repairs from a fire.

What is a Surety Bond Insurance Policy?

The next part of your small business insurance dynamic duo is a surety bond. These bonds simply guarantee that your business will complete the agreed-upon services. Oregon requires certain industries to have a surety bond, and some of your customers might, too. This is because surety bonds protect customers in the chance that you do not complete the project you are hired to do, unlikely as that may be.

How Surety Bonds Work

Surety bonds come into play when a customer files a claim stating that your company didn’t complete the work they were contracted to do. For example, let’s say you are contracted to paint the exterior of a building, but an emergency arises which prevents you from doing the work. Your customer would file a claim with your surety bond to get reimbursement for the incomplete work. However, you won’t be totally off the hook. You’ll have to reimburse your bond company after things are settled with the customer. 

Both general liability insurance and surety bonds let your customers know that you are a small business with integrity, you can be trusted to do what you say, and you can do it well. They work together to protect you and your customers if the unthinkable happens. 

But if you still have questions, that’s ok. You’re an expert in your business, but you don’t have to be an expert on insurance - that’s why I’m here! Let me help you make sure your business and your customers are covered. I offer both general liability insurance policies and surety bond options that fit your budget and your business needs.

Get your policy questions answered and make sure your business is covered.
Message me today!