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’s facing case for damages it could or may not have inflicted upon a person though injury or property damage.
General liability insurance can be purchased independently or within a BOP (Business Owners Policy). A Business Owners Policy packs liability and property insurance into a single policy. The liability insurance coverage limits, however, are usually quite low. Businesses needing a greater 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, accidental injury and damages from false advertising, also called 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 insurance policies always declare a maximum amount that insurers need to give through the policy period. Under the policy, gleam maximum amount that the insurer has to pay per occurrence. For instance, if a company includes a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance company is obligated to pay just the $1.5 million; the others must be paid by the business enterprise company.
As a cover against these kinds of circumstances, companies buy umbrella liability insurance, which makes the picture where general liability coverage stops. It covers payments that go beyond the company’s policy’s limits and gives extra protection for liabilities not covered in the typical insurance policy.
general liability insurance Generally, there is a requirement for the policyholders to report to the insurance company as soon as an accident that can result in a liability claim has taken place. The business owner will then have to assist in the investigations, forward legal notices, etc.