What Is General Liability Insurance?
Insurance is a way to protect yourself when someone makes a claim against you that you are responsible for an injury to them or damage to their property. Through insurance, you can pay for the requested damages without having to tap into your personal finances.
As a business owner, it is essential to have proper insurance to protect your business assets. If someone makes a claim against your business, you could end up losing your business if you don’t have insurance. One of the most common types of business insurance is general liability insurance.
How General Liability Insurance Works
According to the Insurance Information Institute, general liability insurance protects your business against negligence claims. It does not protect you against claims of professional negligence, such as malpractice. It would offer you coverage when someone makes a claim that they suffered an injury on your property or that a product you sold caused them an injury.
The insurance will not only help you to cover any damages the court assigns you to pay but also it will help pay for your legal defense costs.
It is important to note that your general liability insurance will have policy limits. The amount the insurer will pay is only up to your limit. For example, if you have $100,000 worth of coverage, then the insurer will only pay up to $100,000. If the costs of a claim exceed that amount, then you will have to pay it.
General liability insurance has three types of coverage:
- Medical expenses
- Personal and advertising injury
- Bodily injury and property damage
Medical expenses coverage will pay for the medical expenses of a person making a claim against your business. This coverage can payout without any legal claim. It can help to settle small issues quickly without a lawsuit.
Personal and advertising injury coverage will pay for claims of injuries due to situations such as wrongful eviction, libel, false arrest, and copyright infringement.
Bodily injury and property damage coverage will cover physical injuries and related expenses and damages to personal property.
Securing general liability insurance for your business is a good idea. It can help you to avoid financial strain from a claim against your business.