Understanding What Does General Liability Insurance Cover for Your Business

General liability insurance is a type of coverage that protects your business from financial losses due to accidents, injuries, or property damage. This insurance is a must-have for any business, as it can help you avoid costly lawsuits and financial ruin.

One of the key things to understand about general liability insurance is that it covers a wide range of risks, including slips and falls, product liability, and advertising injuries. This means that if a customer slips on a wet floor in your store, or if a product you manufactured causes harm to someone, your general liability insurance will help cover the costs.

General liability insurance typically covers damages up to a certain limit, which can range from $500,000 to $5 million or more. This limit is usually determined by the policy you purchase, and it's essential to choose a limit that matches your business's needs.

If you're in a high-risk industry, such as construction or manufacturing, you may need to pay a higher premium for your general liability insurance. However, this extra cost can be worth it if it means protecting your business from devastating financial losses.

General liability insurance covers a wide range of risks, including personal and advertising injuries. This can include libel, slander, false arrest, and infringing on another's copyright.

Here are some specific examples of personal and advertising injuries:

General liability insurance also provides medical payments coverage, which pays for necessary medical expenses for people injured on your premises or due to your business operations. This coverage is provided on a no-fault basis, meaning it doesn't require a lawsuit to be filed.

General liability insurance provides protection against losses from the legal liability of insureds for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations.

Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.

This type of coverage is crucial for businesses that interact with customers or clients, as something as simple as a guest or a client visiting your business and slipping can result in serious financial damages.

Workers compensation and employment practices liability insurance are excluded, but can be purchased as separate policies.

Pollution liability is also excluded and can be purchased as an endorsement, but high-risk businesses should consider purchasing a separate pollution liability policy.

If you or your employees are found liable for damage to someone else's property, your policy will protect your company.

Damage to customer property that was accidentally damaged by your business is also covered, such as if the owner of a landscaping business accidentally backs up his truck into a client's fence, causing extensive property damage.

General liability insurance does not cover property damage to your own business property.

Personal Injury Coverage is a crucial part of General Liability Insurance, and it's essential to understand what it covers.

Personal and advertising injury liability protects you against liability arising out of certain offenses, such as libel, slander, and false arrest.

This type of liability can be caused by a variety of situations, including slander, libel, intellectual property infringement, or unethical actions by an employee.

Some examples of personal and advertising injury include:

This coverage can be a lifesaver in the event of a lawsuit, providing you with legal assistance to defend yourself against accusations of illegal behavior.

General liability insurance policies typically have a minimum coverage limit, which is usually set at $100,000. This means that if you're found liable for a claim, the insurance will cover up to this amount.

The policy also usually has a deductible, which is the amount you have to pay out of pocket before the insurance kicks in. For example, if you have a deductible of $1,000 and a claim is made for $10,000, you'll pay the first $1,000 and the insurance will cover the remaining $9,000.

The insurance company will also typically have a process for handling claims, which may include investigating the incident, assessing damages, and negotiating a settlement.

General liability insurance policies are divided into two types: claims-made and occurrence policies. The distinction between these two types is crucial in determining a company's protection.

Claims-made policies cover incidents reported during the policy period, regardless of when the incident occurred. This means that if a claim is made during the policy period, the insurance company will cover it.

Occurrence policies, on the other hand, cover incidents that occurred during the policy period, regardless of when the claim is made. This means that if an incident occurred during the policy period, but the claim is made after the policy has ended, the insurance company will still cover it.

The type of policy involved can have a significant impact on a company's protection.

An occurrence policy covers claims for any injuries or damage that occur during the coverage period, even if the claim is made outside the coverage period.

This type of policy provides broad protection for businesses, as it doesn't require the claim to be made during the policy period. In fact, an occurrence policy can cover claims made years after the actual incident.

An occurrence policy is a great option for businesses that want to ensure they're protected for any potential liabilities that may arise from their operations. It's a straightforward and reliable way to safeguard your business against unexpected events.

The distinction between occurrence and claims-made policies is crucial, as it can make a big difference in how a business is protected.

Coverage limits play a significant role in determining premiums for insurance policies.

The amount of coverage included in a policy greatly affects premiums, as seen in auto and homeowners insurance policies.

A higher coverage limit typically means higher premiums, but it also provides greater financial protection in the event of a claim.

Deductibles also impact premiums, with larger deductibles often resulting in lower premiums.

You may want to consider additional liability coverage that's not part of commercial general liability insurance, so talk with your insurance professional about the types of coverages you may need.

Key types of insurance to consider include protection against employee actions, such as slander from a staff member, which can result in a lawsuit.

General liability insurance can protect your business from the actions of staff, including employee liabilities that you can't always control.

You can't always control an employee's actions, but with GLI, you can keep your business protected from the consequences.

Additional liability coverages to consider include types of insurance that are specific to your business, so be sure to discuss your options with your insurance professional.

You need to know what's not covered by your general liability insurance policy, so make sure to check the exclusions carefully. It's a crucial step in understanding your policy and avoiding potential surprises.

One key thing to look for is expected or intended injury, which means the policy won't pay for claims resulting from intentional damage. This includes purposely causing bodily injury or property damage.

Another important exclusion to watch out for is contractual liability, which means the policy won't cover additional liabilities you assume in a contract unless you would have been otherwise legally responsible without the agreement.

When reviewing your policy, also look for premises/operation limitations, which may limit coverage to a select location or operation. This is usually listed as an endorsement and can affect what's covered.

Subcontractor limitations are another important exclusion to consider. If you hire subcontractors, you may need to remove this exclusion to ensure coverage in case they cause damage.

To stay on top of exclusions, commit to reviewing your endorsement schedule page every renewal. This is a quick process that can save you potentially millions of dollars.

Here are some common exclusions to watch out for:

Business and Operations risks are real, and they can happen to anyone. A customer trips on loose flooring and is injured while visiting your business, which can lead to costly medical and legal expenses.

You might be held liable if an employee in your painting or construction business accidentally causes damage to a customer's home. This can result in substantial damage costs and potential lawsuits.

Here are some examples of situations where you could be responsible for paying damages:

It's essential to understand that a Commercial General Liability (CGL) policy protects your business from financial loss in these situations, covering non-professional negligent acts and providing coverage for risks like these.

Don't overlook the CG 2294 endorsement, which excludes coverage to independent contractors or subcontractors. This can be a critical issue if you're hiring subcontractors.

This endorsement is usually listed as a subcontractor limitation, and it's essential to remove it if you're planning to hire subcontractors. Removing this exclusion can often be done for a $100 charge.

If a subcontractor were to leave you responsible for any damages, it's worth getting this exclusion removed.

Business insurance is a crucial aspect of managing risks in any business. It protects your business from financial loss due to liability for property damage or personal and advertising injury caused by your services, business operations, or employees.

A Commercial General Liability (CGL) policy is a type of business insurance that covers non-professional negligent acts. It's essential to understand this coverage to manage CGL risks effectively.

Here are some examples of situations in which your business could be responsible for paying various costs:

If you or your employees are found liable for damage to someone else's property, your policy will protect your company. This is known as third-party property damage.

General liability coverage can also protect against employee actions, such as slander or libel. While you can minimize your own risk of a lawsuit, you cannot always control an employee.

Here are some common risks that a CGL policy provides coverage for:

It's essential to carefully read and understand your commercial general liability policy, as each policy is unique to your company.