General Liability Insurance
General liability insurance is the main coverage to protect your business from: injury claims, property damages, and advertising claims. General liability insurance is also known as Commercial General Liability (CGL).
Commercial General Liability helps protect your assets by providing a first line of defense against a variety of claims for alleged negligence.
Business owners purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence.
It is a coverage for an insured when negligent acts and/or omissions result in bodily injury and/or property damage on the premises of a business, when someone is injured as the result of using the product manufactured or distributed by a business, or when someone is injured in the general operation of a business.
Two factors that determines the amount of coverage a business needs
- Perceived risk. Business owners should first consider the amount of risk associated with their business and also think about the way out.
- The state in which you operate. Businesses that operate in states with a history of awarding high damage amounts to plaintiffs typically need to carry liability insurance with higher coverage limits
How General Liability Insurance Works
Under a general liability insurance policy, the insurer is obligated to pay the legal costs of a business in a covered liability claim or lawsuit. Covered liability claims include bodily injury, property damage, personal injury, and advertising injury.
The insurance company also covers compensatory and general damages. Punitive damages aren't covered under general liability insurance policies because they're considered to be punishment for intentional acts.
General liability insurance policies always state a maximum amount that the insurer will pay during the policy period. Usually these policies also list the maximum amount the insurer will pay per occurrence.
Taking precautions before an accident can help keep your liability and insurance rates down. All businesses can take certain steps to lower the chance of a liability insurance claim:
- Set a high standard for product quality control;
- Make sure all company records are complete and up-to-date;
- Be sure employees are properly trained;
- Get safety tips for your type of business from your insurance company
General Liability Insurance policy cover
General Liability Insurance policy covers the following:
- Bodily injury: It’s the physical harm that happens to someone at your place of business, or an injury caused by your employee at a client's site. Your general liability insurance policy would pay for loss of services, medical care costs and court-awarded compensation for deaths that result from the injury.
- Personal injury: damage to the reputation or rights of a person or business due to slander, copyright, invasion or privacy, false arrest, evicting someone wrongfully, imprisoning someone falsely.
- Completed Products/Operations: If something your company manufactures or a service your company provides causes an injury after your business has completed work for a customer, or from manufacturing and distributing products. Your policy would pay for any resulting legal expenses, as well as damages up to your policy's limit.
- Advertising injury: Losses caused while advertising your company's products or services, your business liability insurance protection will cover the claim. For example publishing false information either verbally or in writing that libels or slanders a person or organization.
- Independent Contractors liability: damage from the acts of an independent contractor hired by your business.
- Property damage: damage to another person’s property it could be as a result of something your business does or something it doesn't do. Your business liability insurance coverage compensates for Physical damage to the property, or Loss of use of the property.
- Note that property damage liability coverage does not cover damage caused to client property you are working on or have in your possession.
- Medical payments: Commercial liability insurance coverage pays the medical expenses of a person injured on your premises up to a stated amount, regardless of fault in order to prevent lawsuits
Here are the damages your Business Liability Insurance will pay:
- General damages: this is for losses that is not able to be seen or felt, although real and therefore difficult to explain exactly and show (pain, mental anguish etc.)
- Compensatory damages: financial losses, the claimant demand for money know as monetary losses.
- Punitive damages: intended punishment for committing a wrongful act
General Liability insurance does not cover the following:
- On-the-job injuries to employees.
- Operating autos or trucks in your business.
- Performing, or failing to perform, professional services.
- Acts as a corporate director or officer.
- Products, such as food items or toys, subject to recall.
- Losses related to war, terrorism, or nuclear events
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