Insurance for Entrepreneurs
General Liability Insurance in Maryland: Everything You Need to Know
In Maryland, businesses of all kinds need to buy general liability insurance. It’s the first and most fundamental type of business insurance, providing critical financial protection. Every other coverage a business owner purchases will be structured around this essential policy.
What Does General Liability Insurance Cover?
General Liability Insurance in Maryland provides coverage for four key risks:
1. Bodily Injury
If a customer or third party is injured on your business premises or due to your business activities, general liability insurance covers medical expenses, legal fees, and potential settlements. Slip-and-fall accidents are the most common type of bodily injury claim. If someone gets hurt at your office or job site, this coverage helps protect your business from financial loss.
2. Property Damage
This coverage protects your business when it is responsible for damaging someone else's property. For example, if a contractor accidentally damages a client's home while performing repairs, general liability insurance covers repair costs.
3. Personal and Advertising Injury
General liability insurance also covers libel, slander, copyright infringement, and false advertising. If a competitor sues your business for misleading claims in an advertisement, this policy can cover legal expenses.
4. Legal Defense Costs
Most general liability insurance policies include unlimited legal defense costs, separate from the settlement limits. In many cases, insurers pay more in legal fees than in settlements, making this a crucial aspect of coverage.
5. Medical Payments
This provides No Fault Slip and Fall Coverage on your premises, usually for around $5,000. It’s designed to discourage lawsuits by paying out of pocket medical expenses.
Why Maryland Businesses Need General Liability Insurance
1. Protection Against Financial Loss
Without general liability insurance, businesses must cover lawsuits and claims out of pocket, which can be financially devastating.
2. Required for Business Contracts and Leases
Many landlords and clients require proof of general liability insurance before signing leases or contracts.
3. Peace of Mind
Knowing your business is protected against common risks allows you to focus on growth and operations instead of worrying about legal expenses.
4. Maintaining Business Reputation
Handling claims and accidents professionally with insurance demonstrates responsibility and trustworthiness, helping maintain your business's reputation.
How to Get General Liability Insurance in Maryland
Step 1: Decide Whether to Use an Independent Agent or Buy Directly
An independent insurance agent can guide you through the process, helping you compare policies and handle paperwork. If you choose to do it yourself, follow these steps:
Step 2: Assess Your Business Needs
The right insurance coverage depends on factors such as:
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Industry Type – High-risk industries (e.g., construction) need higher coverage limits than low-risk businesses (e.g., consulting).
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Business Location – Some landlords and states require minimum coverage amounts.
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Client Contracts – Certain clients may require specific levels of coverage.
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Business Size and Revenue – Larger businesses face greater liability risks.
Step 3: Research and Compare Insurance Providers
Once you determine your coverage needs, research top-rated insurance providers that specialize in your industry.
Step 4: Get and Compare Quotes
Premiums vary based on business type, coverage limits, and location. Get quotes through:
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Insurance Provider Websites – Many offer instant online quotes.
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Insurance Marketplaces – Platforms like CoverWallet and Simply Business compare multiple quotes at once.
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Insurance Brokers – Brokers help find the best policy for your specific needs.
When comparing quotes, pay attention to: ✔️ Coverage Limits – Higher limits offer better protection but come with higher premiums. ✔️ Deductibles – A higher deductible lowers premiums but increases out-of-pocket expenses. ✔️ Policy Exclusions – Understand what’s not covered. ✔️ Additional Coverage Options – Some policies allow endorsements for specific risks.
Step 5: Choose the Right Policy and Provider
When selecting an insurer, consider:
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Reputation and Customer Service – Read customer reviews.
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Financial Strength – Check ratings from A.M. Best, Moody’s, or Standard & Poor’s.
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Ease of Policy Management – Look for online tools for claims and payments.
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Flexibility – Ensure the provider allows coverage adjustments as your business grows.
Step 6: Purchase the Policy
Once you've chosen the best policy:
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Fill Out an Application – Provide details about your business.
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Review Policy Terms – Ensure coverage limits and costs meet your expectations.
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Make Payment – Choose between annual or monthly payment options.
Receive Proof of Insurance – Most insurers provide a Certificate of Insurance (COI) required by clients or landlords.
How Much Does General Liability Insurance Cost in Maryland?
The cost of general liability insurance in Maryland varies based on:
1. Industry and Risk Exposure
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High-risk businesses (e.g., construction, manufacturing) pay higher premiums than low-risk industries (e.g., consulting, marketing).
2. Business Size and Revenue
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Larger businesses with higher revenue have greater liability risks and higher premiums.
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Small home-based businesses typically pay lower premiums.
3. Coverage Limits
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Standard policies are $1 million per occurrence / $2 million aggregate.
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Higher coverage limits increase costs.
4. Business Location
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Costs vary based on state and city.
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Areas with higher litigation rates may have higher premiums.
5. Claims History
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A history of frequent claims increases costs.
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A clean claims history can lower insurance rates.
6. Deductibles
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A higher deductible lowers premiums, but increases out-of-pocket expenses.
7. Policy Bundling and Discounts
Bundling General Liability, Commercial Auto, and Workers’ Compensation can help reduce costs.
Conclusion
General Liability insurance is a necessary part of an insurance program for any business in Maryland. It provides financial protection and peace of mind.
Everyone's needs are unique. I strongly recommend finding a good independent broker that can help you select the correct program for you and your business.
