In the modern society, a little accident can lead to 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 a lawsuit for damages it could or may not have inflicted upon a person though injury or property damage.
general liability insurance General liability insurance can be purchased independently or as part of 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 being an independent policy.
In a general liability insurance policy, legal costs of a business in a covered liability lawsuit need to be paid by the insurer. Covered liability claims include property damage, bodily injury, personal injury and damages from false advertising, also called advertising injury. Insurance companies also cover general and compensatory damages. However, liability insurance policies 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. Beneath the policy, gleam maximum amount that the insurer must pay per occurrence. For example, if a company has a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance provider is obligated to cover just the $1.5 million; the others has to be paid by the business company.
As a cover against these kind 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 typical insurance policy.
Generally, there is a requirement of the policyholders to report to the insurance company the moment an accident that can result in a liability claim has had place. The business owner will have to assist in the investigations, forward legal notices, etc.