Commercial General Liability Insurance
If business insurance was your evening dinner, then you could think if the general liability insurance as the main course. It’s the feature insurance protection you’re building all your other business insurance protection around.
General liability insurance can be sold as part of a package, as part of a business owner’s policy, or as a stand-alone policy. So, using our evening dinner metaphor, you can get is as part of a 4-course meal, a convenient box meal, or al la cart.
Still Wondering: What is General Liability Insurance?
General liability insurance is the foundational layer of insurance protection for your large, medium or small business. The benefits offered are broken out into four (4) different categories:
- Third-party injuries & property damage
- Product liability
- Advertising injury liability
- Premises injuries for parties harmed while at your facilities
To get a better understanding of the way your general liability insurance works, let’s explore each of these four (4) items.
Coverage for Third-Party Injury & Property Damage Lawsuits
A third-party is someone other than you, your employees, or the insurance company providing your business insurance. Basically, they are someone outside the insurance-business relationship.
If a third-party gets hurt while visiting your business, they may be able to hold you liable for the costs associated with their injuries.
Let’s just see how this might work: Let’s assume you own a retail clothing store, and during a raining day a customer comes into your business and slips on a wet area of the floor and hurts her back during the fall. You didn’t notice the wet floor.
The customer elects to treat with a doctor, then a chiropractor, and both agree that the injuries are due to the slip-and-fall in your business. To make matters worse, the customer requires several treatments, has even missed some time at work, and she is now asking you to pay for the damages.
The medical expenses in a case like this can get expensive, and the average person doesn’t have the money to pay out-of-pocket. Even if they have insurance, they won’t feel good about paying deductibles and co-pays, not to mention the lost time at work.
It’s easy to see how something like this can get referred to an attorney, and your business ends up with a burdensome lawsuit.
It’s for cases just like these that you purchased your general Liability insurance policy. For a covered loss, it’s your general liability coverage that can provide a legal defense and provide settlement for a fair amount for medical expenses and loss wages. That’s the third-party injury component.
To understand how property damage protection works on a general liability insurance policy, imagine the same scenario, but the woman landed on her bag and smashed a tablet computer, and her expensive watch.
In lawsuits or insurance claims over third-party injury or property damage, General Liability benefits are designed to provide coverage for:
- Attorney’s Fees
- Court and legal expenses.
- Judgments, if the case goes to trial and you’re found liable.
Coverage for Immediate Medical Expenses
In some ways this is similar to the examples provided in the above in third-party injury example. However, in this case, instead of the injured women leaving your premises, you are able to assist her by calling emergency medical services.
Not only were you a Good Samaritan for helping care for the injured women, your actions may have even helped to mitigate the potential damages.
This is a better outcome for both parties.
You can still turn to your general libation insurance policy and request payment for the emergency medical services, and other related medical expenses incurred by the claimant.
Even better? Your Commercial General Liability Insurance covered the initial ambulance ride and related expenses.
When you have immediate medical expense coverage as party of your general liabilities insurance protection, this allows business owners to take care of small problems before they become big ones. Insurance companies like when claims are address swiftly. The faster a claim can be addressed, statistically, the less expensive they are.
Products Liability Insurance Coverage
It’s sometimes easier to understand how injuries and potential liabilities may occur on your premises. But not all injures happen within the four-walls of our business location.
Sometimes the injuries are a result of the products you either manufacture or sell. The product you sell can harm your consumers, causing injuries or other damages. These types of liabilities are covered by the products liability portion of your general liability insurance.
Image you manufacture a hand lotion. A consumer purchases your hand lotion, and after several days use begins to breakout in a painful rash. Scarier yet, imaging that many consumers who purchased your lotion suffered a similar rash.
It is very likely that the customer will sue you, and any others involved in the manufacture and distribution of the lotion. The insurance protection for this type of exposure is called product liability insurance.
Even if you aren’t the manufacture of a product, under strict liability laws that exist in most states, you may still be liable for the damage, even if it was entirely the manufacturer’s fault.
If you’ve purchased a good general liability Insurance policies, this type of exposure products liability is typically cover.
Advertising injury insurance protection
Maybe you have a homebased business, and all you provide are services. You may be thinking that you don’t need general liability insurance protection.
While it’s never recommended to run a company without business insurance, there is one very neat feature of the general liability insurance policy that may underscore why even your homebased, service business can use general liability insurance.
Advertising injury coverage provides protection if a third-party sues you for an advertising injury. Such an injury could be any one of the following:
- Copyright infringement
- Defamation (including slander and libel)
- Invasion of privacy
If you’ve been sued for any of these your general liability insurance coverage may provide coverage under advertising injury protection, and you can even get the cost of your legal defense covered too.
This is particularly helpful in the age of social media and other types of online publication. Now that it’s easier than ever to make public claims and share images, it’s also easier than ever to be accused of defamation or copyright infringement.
Whether you’re sued over a misinterpreted tweet or an image you didn’t have the rights to post, your Commercial General Liability Insurance may be able to cover your legal costs so that they don’t hurt your bottom line.
So, what does general liability insurance intend to cover
In general terms, the areas of your business risk exposure that a general liability insurance policy may cover, and may not coverage are the following:
General Liability Insurance may cover…
- Third-party injury lawsuits (eg. slip-and-fall).
- Third-party property damage lawsuits.
- Product liability lawsuits.
- Libel, slander, and defamation lawsuits.
- Copyright infringement lawsuits.
It does not cover…
- Professional errors.
- Employee injuries.
- Damage to your business property.
- Employee discrimination lawsuits.
In the market for general liability insurance?
If you are shopping for general liability insurance you may be surprised to find that it is a very affordable insurance protection. Policies are typically offered as $1 million / $2 million in policy limits. (Note: this means that there is $1 million available for any single claim and up to $2 million for all claims within the policy term.)
You can also get your general liability insurance as part of a package, or a business owner’s policy. Just give us a call at 877-334-7646 and one of our business insurance agents will be glad to help.
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