General Liability Insurance at a Glance:
As implicit from the name, I mean “general liability insurance” this type of insurance policy embraces claims that come under other types of liability insurance such as public, employer and product liability. What is not covered by any of these types of policies? It is good to mention that none of these types of liability insurance policies protects the insured against any claim resulting from the intentional act. For example, a criminal act was done by the insured that causes another injury is never covered by any of these types of policies.
General liability insurance is one of the types of liability insurance that protects the insured against numerous kinds of claims resulting from damage inflicted on another by the insured. Any general liability insurance policy will clearly state what the maximum amount is that the insurance company will pay per event.
For example, if a business has a $500,000 cap on its liability coverage and it is successfully sued for $600,000, the insurance company pays the $500,000 and the business must pay the other $100,000. To handle this type of case, many businesses buy ‘umbrella’ liability insurance which takes care of the excess amounts — in the case of the above example, the extra $100,000.
The typical insurance company requires that a policyholder must immediately report any accidents that may lead to a liability claim. The event also must be very well documented and all summonses and legal notifications must be sent to the insurer immediately upon receiving them.
The policyholder also must be fully cooperative if an investigation is ordered regarding the case. It can be confusing for a business owner to know exactly how much general liability coverage to buy. Having the right amount of coverage may mean the difference between success or failure when faced with an accident or a liability claim. That is why many business owners choose to work with independent insurance brokers.
Why a Broker?
A broker is a ‘go-between’ for businesses and insurance companies. Once a business insurance broker is contacted and the company’s needs are discussed, he/she will search for and find the best general liability coverage for the company in question.
The injury done may be bodily injury, personal injury, damage to another person’s property and injury caused by the insured business operation. In other words, general liability embraces other forms of liability insurance like public liability, employer’s liability and product liability. The way the policy is sold differs from countries to countries even though the general principle remains the same. General liability can be bought as a stand-alone policy. However, it is also available in combination with BOP which is an acronym for business owners’ policy. In the US, homeowners can buy this type of insurance in the form of homeowner’s insurance while it is available for businesses in the form of commercial general liability policies.
Who needs General Liability Insurance?
Numerous lawsuits and claims are being filed daily today. This is because people are becoming aware of their rights to file for damages. Nobody will like to spend money on injury inflicted by another person. Some of these injuries may result from accidents making it impossible for people to avoid. The above highlights the importance of covering one’s business with general liability insurance. In other words, virtually everybody needs this type of insurance. If you are a motorist, for example, certain fault in your car which you may not know can lead to an auto accident which might cause some injury to another person. The mistake of another driver can also get you involved in motor accidents. So, everybody needs such coverage. Small and medium businesses: if you are running a small or medium business, you need to buy this type of coverage to protect your business against any lawsuit resulting from injury caused by your product to the consumer as a result of production mistake or negligence. It will also protect you against injury sustained by your employee in the cause of their work. Contractors are among the people that require this type of insurance coverage. If you are a building contractor for example, and the building you are handling collapses causing serious injury to your worker or even a passerby, you will likely be sued for damages. With this type of insurance, you are protected against such claims. As it has been said, the above-mentioned individuals do not exhaust the list of people that need this type of insurance.
What does General Liability Insurance cover?
General liability insurance as it is abbreviated covers a lot of things depending on the limits of your policy. Here are some of the damages that are covered by this type of insurance. Bodily injury: this refers to the physical injury done to another individual(s) that you are legally liable. Property damage: it is the damage done to another person’s property by the insured. Personal and advertising injury: claims made against you for libels Advantages The importance of GL for businesses cannot be overemphasized. It a veritable means through which businesses protect themselves against lawsuits resulting from the injury done to another in the cause of the execution of their work. The amount for some of these claims may be above the assets of your business. So, get GL and be protected against loss. Liability insurance companies What is liability insurance? This is a type of insurance that covers the insured against any form of liability arising from claims or lawsuits for injury done to another by the insured. The distinguishing feature of this type of insurance policy is that the compensation is not paid to the insured but to a third party who files the lawsuit for the injury done to him or her by the insured. However, the protection is given to insured only against claims and lawsuits that fall within the policy of the insurance coverage. Duties of liability insurers to the insured The liability insurance companies or insurers have several duties to the insured. Below are the duties of the insurers. The insurer must defend the insured if there is any lawsuit against the insured that falls within the coverage policy. However, it is the responsibility of the insured to inform the insurer about the lawsuit by tendering a defence of the claim to the company. The insured has to send the copy of the lawsuit with a cover letter calling for the defence about the relevant policy. The insurance company has three options. The insurer can honour the request and defends the insured. The second option for the insurance company is to seek a declaratory judgment of no coverage. The last option is to refuse to take either of the two options mentioned above. The second duty of the liability insurance company is to indemnify the insured. This means that the insurance must pay “the amount” declared by the court that the insured should pay to the claimant. However, it is the liability insurance policy that will determine the actual amount that the insurer is supposed to pay for injury done to another by the insured. In situations where the claim for the damages done is above the policy limit or is equal to the policy, then the insurance company has to settle reasonable claims. This duty is not generally obtainable in all jurisdictions in the US. This website is not an official one, so Plz contact experts to get yourself completely informed. thanks for reading.