What Is General Liability Insurance?
What Is General Liability Insurance?
General Liability Insurance is a type of business insurance that protects your company against liability claims. These claims may involve bodily injury or property damage.
Your policy may also cover a variety of other risks you face as a business, including copyright infringement and reputational harm. It can help you stay focused on running your business instead of worrying about paying expensive legal costs and settlements.
Coverage
General liability insurance (GL) is a type of business insurance that protects your business from the financial costs of lawsuits. This coverage helps pay for damages if a customer gets injured at your business, if you accidentally damage their property or if someone sues your business over libel or copyright infringement.
General liability protects against the most common risks of running a business, including bodily injury and property damage. It can be purchased as a stand-alone policy or as part of a Business Owner’s Policy (BOP).
Most businesses need some form of general liability to protect their profits from claims made by others. This insurance covers you against expenses like medical costs, repair or replacement cost of property and other related losses if someone is injured by your products or services, if you accidentally damage their property, or if they file a claim for libel or slander.
It also covers the legal costs of defending you in court if you are sued for these kinds of claims. Some policies provide retroactive coverage, which means that you’ll be covered even if you don’t have the policy in place when an accident happens.
GL also covers your reputational harm, such as when customers get a bad impression of you or your employees due to the way you conduct business or the information you publish. This can include libel, slander and copyright infringement.
These are common issues that can occur in any business, but it’s especially important to consider them for small businesses that often interact with third parties. This is why it’s considered one of the most essential types of business insurance.
This kind of coverage is typically written in a commercial general liability (CGL) policy. It also includes a product liability endorsement, which protects your business against claims that you knowingly formulated or distributed a defective or harmful product that caused an injury to someone.
If you want to know more about your risk and how much general liability insurance you should buy, talk to an insurance agent. They’ll help you customize your policy to meet your unique needs.
Limits
General liability insurance provides protection against bodily injury and property damage claims resulting from the business operations of your company. It also covers legal fees for lawsuits that result from a claim against your business.
A business’s policy may have both per-occurrence and aggregate limits. In most cases, the occurrence limit is the maximum amount that an insurer will pay for one event/claim, while the aggregate limit is the total amount of money that an insurer will pay during the policy period.
You can increase or decrease these limits at any time during the policy period, with underwriting approval. Higher limits generally come with higher premiums, though.
When choosing your policy limits, you need to consider your business’s overall risk factors, as well as other legal requirements that are unique to your industry. Your Garrity Insurance agent can help you determine the best policy limits for your business.
For example, if you are a grocery store owner, you would need to select the limits that best fit your business’s liability risks. For instance, you could choose a higher occurrence limit than a more high-risk industry like construction to ensure that you’re covered in the case of an accident.
In addition, you might want to select a higher aggregate limit than what you currently have to cover any potential future lawsuits that might occur. For example, if you have a professional liability policy with $1 million per incident and $2 million aggregate, you’ll need to make sure that this limit doesn’t run out before the end of your policy.
The most common types of limits include:
Product Liability: This type of coverage protects your company against claims relating to the products that you manufacture, sell, or distribute. It can include damage to third-party property or injury caused by a defective or improperly labeled product.
Completed Operations: This type of coverage protects your company if a customer becomes injured due to something that you do at the completion of a project. It can include damage to third-party properties, such as a customer’s car.
Many business contracts, such as client agreements or rental agreements, require a certain amount of coverage. For example, most client contracts require a minimum per occurrence and aggregate limit of at least $1 million. Other businesses, such as manufacturers that mass-produce products, might require higher aggregate limits than these.
Exclusions
General liability insurance is a key piece of any business owner’s insurance portfolio. Without it, a lawsuit for bodily injury or property damage can seriously damage a company’s reputation and financial stability.
It’s also often required by landlords and lenders. So, it’s important to understand what coverage you have and what’s excluded.
Exclusions are provisions in a policy that exclude certain types of claims or injuries from coverage under the policy. It is very important to understand these exclusions as they can greatly impact a policyholder’s insurance protection.
The first common exclusion is a property exclusion, which prevents an insured from receiving liability coverage for property that is owned, rented to, or occupied by the insured. For example, if you borrow a hydraulic lift to work on a construction site and damage it, your general liability policy won’t cover the cost of repairs.
Another exclusion is a pollution exclusion, which prevents an insured from being covered for any bodily injury or property damages caused by pollutants on the premises of the insured. This is because pollutants include smoke, vapors, fumes, and other hazardous substances.
Lastly, there is an employee exclusion, which prevents an insured from getting liability coverage for any claim against them resulting from an accident that occurs during the course of their employment. This includes claims against the insured’s employees for personal injury or damages to their property that occur during the course of their employment.
There are several other exclusions that may not be apparent at first glance but could have a significant impact on your business. These exclusions are:
The «you work» exclusion is a common one that many policyholders don’t understand and need to be made aware of. Despite the aforementioned concerns, this exclusion makes sense and is designed to protect a policyholder’s interests. It’s a policy that every business should have and read carefully to make sure they are getting the coverage they need. So, if you’re looking for a great general liability insurance policy that can protect your business, don’t hesitate to give us a call!
Reporting
General liability insurance is one of the most important insurance policies you can purchase. It’s designed to protect your business from the high cost of lawsuits.
Typically, it pays for third-party claims of bodily injury or property damage that result from your business operations, products, and services. The coverage also covers losses resulting from errors and omissions in your advertising and other business activities.
It also provides a solid level of protection in the event you are sued for libel or slander. It may be purchased as a standalone policy or in conjunction with a comprehensive Business Owner’s Policy (BOP).
You need to know exactly what you are getting into when buying general liability insurance. Your agent will walk you through the options available and help you make the right decision for your specific needs.
If you do opt for the general liability insurance juggler, be sure to understand your policy’s reporting requirements before filing any claims. Your insurer may ask for detailed information about the accident or loss, including how it happened, where the damage occurred, and what type of property was damaged.
The insurer’s representative will also likely need a copy of your business license and tax identification number in order to verify you are authorized to file a claim. They will likely provide you with a form to fill out, which you’ll need to submit with your claim information.
The insurer’s representative will likely ask for detailed information about the accident or loss, include how it happened, where the damage occurred, what type of property was damaged, and what type of insurance coverage you have. They will likely provide you with a report to read and keep track of, which you’ll need to submit with all your other claim paperwork.
