In the modern society, a small accident can result in protracted and potentially money- sapping lawsuits. General liability insurance, therefore, becomes essential for most companies. General liability insurance protects a company’s assets when it is facing case for damages it could or may not have inflicted upon an individual though injury or property damage.
general liability insurance General liability insurance can be bought independently or within a BOP (Business Owners Policy). A Business Owners Policy packs liability and property insurance right into a single policy. The liability insurance plan limits, however, are usually quite low. Businesses needing a larger coverage usually buy liability insurance as an independent policy.
In a general liability insurance policy, legal costs of a small business in a covered liability lawsuit have to be paid by the insurer. Covered liability claims include property damage, bodily injury, personal injury and damages from false advertising, also known as advertising injury. Insurance firms also cover general and compensatory damages. However, liability plans usually do not cover punitive damages, because they are deemed punishment for deliberate actions.
General liability plans always declare a maximum amount that insurers need to give during the policy period. Under the policy, gleam maximum amount that the insurer must pay per occurrence. For instance, if a company has a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance provider is obligated to pay just the $1.5 million; the others should be paid by the business enterprise company.
As a cover against these kinds of circumstances, companies buy umbrella liability insurance, which comes into the picture where general liability coverage stops. It covers payments that exceed the company’s policy’s limits and gives extra protection for liabilities not covered in the standard insurance policy.
Generally, there is a requirement of the policyholders to report to the insurance company the moment an accident that can lead to a liability claim has taken place. The business owner will have to help in the investigations, forward legal notices, etc.