What is general liability insurance?

What is general liability insurance?

May 15, 2020
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What is General Liability?

General Liability "GL" can help protect your business if you were sued by someone for causing property damage or bodily injury.  This is the most common and important type of insurances you can carry for your business.  GL coverage can help cover your costs for: legal teams representing you, witness fees, evidence costs and judgments or settlements. 

  • For example:
    • Third-party bodily injury is when someone is injured on your business property and sues you (i.e., slip and fall). 
    • Third-party property damage is when you or one of your ‘employees’ damages someone else’s property (like breaking a neighbor’s window). 
    • Reputational harm is when someone sues your business for slander or libel.  Advertising injury is when our business matches another’s and they sue us for hurting their business.

Coverage is commonly represented on a per occurrence, annual aggregate basis.  Such as a policy carrying $1MM per occurrence and a $2MM annual aggregate.  This means there is only $1MM of coverage for any one claim and up to a total of $2MM for all combined claims during the policy term.  A payment for a single claim will not exceed the per occurrence limit and a payout for all incidents in a year will not exceed the annual aggregate.

How does insurance protect your business?

Insurance protects your company assets in the event you are sued.  It helps to prevent bankruptcy and business failure when your assets are insufficient to cover a legal judgement by lending financial strength to your business by providing evidence of insurance.  Insurance also satisfies interested third parties, like landlords or lenders.  Provides peace of mind to your customers that you will help make them whole in the event your service or product hurts them.

Special notes

Exclusions and limitations are common on all policies and business types.  At the time we look to bind coverage, we will review these carrier specific limitations.