In the modern society, a small accident can result in protracted and potentially money- sapping lawsuits. General liability insurance, therefore, becomes a necessity for some companies. General liability insurance protects a company’s assets when it’s facing a lawsuit for damages it may or might not have inflicted upon an individual 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 often 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 need to be paid by the insurer. Covered liability claims include property damage, bodily injury, accidental injury and damages from false advertising, also known as advertising injury. Insurance companies also cover general and compensatory damages. However, liability insurance policies 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 through the policy period. Under the policy, there is also a maximum amount that the insurer has to pay per occurrence. For example, if a company includes a $1.5 million occurrence cap and loses case of $2 million; the insurance company is obligated to cover 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 exceed 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 are accountable to the insurance company when an accident that can result in a liability claim has taken place. The business owner will have to assist in the investigations, forward legal notices, etc.