Understanding General Liability Insurance
In today's litigious society, even small mishaps can result in large lawsuits. That's why general liability insurance, along with property and worker's compensation insurance, are essential for most companies. Liability insurance protects the assets of a business when it is sued for something it did (or didn't do) to cause an injury or property damage.
General liability insurance can be purchased separately or as part of a business-owner's policy (BOP). A BOP bundles property and liability insurance into one policy; however, the liability coverage limits are generally pretty low. Businesses that need more coverage usually purchase liability insurance as a separate policy. The amount of coverage a business needs depends on a couple of factors:
How General Liability 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 (damage from slander or false advertising). 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. For example, if a company has a $1 million occurrence cap in its liability policy and it's successfully sued for $1.5 million, the insurer would pay $1 million and the business would be responsible for paying $500,000.
To cover these types of situations, many companies purchase umbrella liability insurance, which picks up where their general liability coverage ends. Umbrella liability covers payments that exceed their other policy's limits, and provides additional coverage for liabilities not covered in a standard liability insurance policy.
Most insurance companies require their policyholders to report as soon as possible any accidents that could lead to a liability claim. The insurer may then require the business owner to document the situation, forward all summonses and legal notices, and cooperate fully in any investigations.
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:
Checklist of Issues to Review for General Liability Insurance
Following is a checklist of key issues for a business to review in analyzing the terms and conditions of a liability insurance policy:
Frequently Asked Questions Regarding General Liability
It is our hope that providing answers to some of the most commonly asked questions will help you in making an informed decision regarding your own insurance needs.
Q: WHY SHOULD I HAVE LIABILITY INSURANCE?
Q: WHAT IS PROD/COMP OPS?
Some examples are:
Q: WHAT IS MED PAY?
Q: WHAT IS AN ADDITIONAL INSURED?
Q: WHAT IS CONTRACTUAL LIABILITY?
Q: WHAT IS AGGREGATE? WHAT IS OCCURRENCE?
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Whether you're looking for General Liability, Worker’s Compensation, Property or Commercial Auto coverage for your Business, GoldenStateBusinessInsurance.com’s dedicated team of highly qualified professionals is committed to finding the best price and coverage options to protect you and every aspect of your company. No matter what kind of Business Insurance you may need, whether Workers Compensation, General Liability, Property, Commercial Auto Insurance, our Agents and Brokers will shop as many as 46 top rated insurance carriers to offer you the best value and price for your Business Insurance protection and save your money! We can quote and provide “A” Rated Insurance and Protection for all your Business Insurance needs.
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