If you wondering what general liability insurance is and why it may be needed for your business are you confused by what is and what is not covered by general liability insurance sometimes called GL insurance are you trying to figure out the difference between liability and business liability insurance in a bot policy business insurance can be complex and confusing?
If you are a business owner then you must have a fear of legal claims or any financial losses in any unfortunate event like an accident or an injury that occurred on the premises without any coverage these events can lead to heavy financial losses.
General Liability Insurance is a type of insurance policy that acts as a protection barrier safeguarding your business either small or big providing various types of claims some of which include bodily injury, property damage, and advertising injury. In addition providing legal protection, case settlement, court costs, attorney fees, etc.
What Is General Liability Insurance?
A General liability insurance is sometimes known as business liability, comprehensive general liability or commercial general liability insurance.
A general liability insurance is a form of business insurance intended to protect your company from lawsuits and other claims that may arise, from three key areas bodily injury property damage, and advertising or personal injury.
General Liability Insurance For Small Businesses
The most common method by which general liability insurance is given to any small business is via a business owner’s policy.
What Is Business Owner’s Policy (BOP)
A Business Owner’s Policy (BOP) is a type of policy that combines general liability insurance with property insurance to form a package policy.
Thereby adding some extra coverages that are most commonly needed by a business owner.
Why Small Businesses Need General Liability Insurance
Why do businesses need general liability insurance this is because businesses never intend to have accidents or intend to have someone get injured but accidents do happen and the consequences of accidents can have a significant impact on businesses in the form of lawsuits.
The more serious someone’s injuries are or the more people that are injured in a common accident the greater the amount of that lawsuit may be for those injuries.
General liability insurance gives coverage and pays for the legal, court, and settlement costs.
What Are General Liability Insurance Coverages?
If you are looking to buy general liability insurance then you should know about the coverages that general liability insurance provides for businesses:
Premises Liability: If you own a premises such as an office a retail shop or a service business and someone enters your premises and get injured then they can file a lawsuit against you for their injuries.
This is where it gets expensive it’s important to point out that a feature in the general liability policy called medical payments or med pay can step in to pay for or reimburse that injured party for their medical bills.
Operations Liability: Just discussed the injury causing the workplace can lead you to a lawsuit against you, what about operations liability such as a contractor who may drop a hammer on a construction site and hit another subcontractor injuring them? The policy covers the medical bills, and all the pain and suffering to settle a claim.
Products and Completed Operations Liability: If you make or produce a product, or if you just sell products, your product could harm or injure the user of the product.
Product liability lawsuits can arise from faulty products that cause injury or consumable products that harm somebody. These types of claims are also covered under the general liability policy completed operations liability.
Advertising And Personal Injury: Advertising And Personal Injury are often the most confusing part of a general liability policy because it doesn’t involve bodily injury or property damage, instead it involves claims arising from defamation false arrest copyright infringement that is the use of another person’s advertising ideas and invasion of privacy.
What Is Not Covered in General Liability Insurance Policy?
Liability insurance policies are designed to protect a firm from specific hazards or claims it’s generally not going to be covered under the general liability policy and here are a few of them:
Auto Liability: While you can often include hired and non-owned autos in a business owner’s policy, liability section owned autos are excluded from the general liability policy.
Employer Liability: It is included in the worker’s company policy and is not covered under the general liability policy.
Employment Practice Liability: This is a policy that covers claims alleging wrongful employment acts such as harassment, discrimination, and wrongful termination, and these kinds of claims are strictly excluded under the general liability policy.
Pollution: If you have a claim resulting from pollution it’s generally going to be excluded under the liability insurance policy.
Product Recall: If you are a manufacturer or a distributor and if your product causes an injury or harm to a third party such as a customer those claims are going to be covered. However, the consequential claim, or the cost to recall that potentially dangerous product from the marketplace, is not covered under a general liability policy.
Conclusion
So these were all about the comprehensive general liability insurance policy knowing about what is it? Liability insurance for small business, why one needs a liability insurance, and what is covered and what’s not covered in this insurance policy.
The most critical part of any business insurance policy including general liability insurance is you the buyer and the policy holder should read the policy to understand what the policy is all about, what is covered in the policy, and what is not covered. You can ask your agent to go through it with you.
The more educated and informed you are about what is and what’s not covered the better decisions you can make down the road.