General liability insurance in Hawaiʻi protects businesses against liability claims, such as third-party property damage and bodily injuries. Some policies also include coverage for damage to reputation, such as libel, slander, and copyright infringement. Legal expenses, such as hiring an attorney or judgments against the business, may also be covered.
While Hawaiʻi does not legally require businesses to carry general liability insurance, it is highly recommended. According to BusinessDIT, 7 million small businesses rely on commercial insurance to continue operating.
General liability insurance can help Hawaiʻi businesses cover claims that may arise during normal business operations, ranging from accidental damage to a client’s home to slip and fall injuries on business premises.
What Does General Liability Insurance Cover?
Also called business liability insurance, general liability policies can help protect business owners from significant out-of-pocket costs. GLI can be purchased as a standalone policy or bundled with other key coverages through a Business Owner’s Policy (BOP).
General liability insurance helps cover claims pertaining to third-party bodily injury and property damage, reputational harm, and advertising injury.
When Is General Liability Insurance Needed?
While not every Hawaiʻi business requires general liability insurance, it is recommended in most cases. GLI can help protect businesses from costly lawsuits and common risks that nearly every type of business is exposed to at one time or another.
Some instances in which Hawaiʻi businesses need general liability insurance include:
1. When You Apply for a Professional License
When applying for a professional license, a business owner may be required to carry general liability insurance. For example, local governments often require individuals to provide proof of GI insurance coverage before approving an application for a business or professional license.
Carrying general liability insurance demonstrates that the business is protected from common liability risks.
2. When You Lease an Office Space
When leasing commercial space for a business, business owners must carefully review the lease terms to determine what requirements must be met to remain compliant.
Some landlords may require business owners to carry general liability insurance to cover legal defense costs if an accident occurs on the property. For example, if a customer slips and falls in a restaurant and suffers injuries, a general liability policy
would cover all or most of the cost of a lawsuit and medical payments.
3. When You Sign a Contract with a Client or Company
Entering a contract with a client or company requires business owners to meet specific requirements, such as providing proof of general liability insurance coverage.
Many clients and companies require contract parties to carry GLI as it indicates that the company’s finances are reasonably secure in the event of a covered incident. With general liability insurance, clients are reassured that the business can compensate them if someone is injured on the premises or their property is damaged.
4. When You Want to Boost Your Credibility
Building credibility is essential for every business, especially companies new to their chosen industry. There are many ways that businesses can build credibility, such as by providing top-notch service and honestly advertising their products.
Another way to build credibility is to carry commercial insurance. Having the right policies shows contractors and customers that the business is prepared to manage risks. Businesses can also communicate to contractors and customers that they will provide them with the proper protection, regardless of the type of incident.
5. When You Want to Protect Against Mistakes
Despite the precautions businesses take to avoid errors in their day-to-day operations, accidents can and do occur. Unfortunately, these mistakes can be costly, especially without insurance coverage.
For example, if a restaurant serves food that unknowingly contains contaminated ingredients, causing customers to fall seriously ill, they could face significant out-of-pocket costs for lawsuits and medical bills. General liability insurance can help cover these expenses, enabling businesses to financially recover from their mistakes.
6. When You Want Financial Assistance with Lawsuits
Business litigation takes many forms, including misrepresentation, contract disputes, premises liability, employment matters, false advertising, data, and similar events. When an incident results in third-party bodily injury or property damage, the business could face a lawsuit.
General liability insurance can help cover lawsuits, including the cost of hiring an attorney and associated legal fees. It can also cover any judgments or settlements handed down by the court.
Request a General Liability Insurance Quote
Running a business requires significant time and money, yet just one incident could force a business owner to close its doors permanently. The proper commercial insurance can make all the difference when protecting a company against common risks.
To discuss your business insurance needs or request a quote for general liability insurance, contact Atlas Insurance Agency at (808) 400-6634.