What Falls Under General Liability Coverage?

General liability insurance is a basic yet important policy designed to cover accidents that occur frequently when it comes to running a business. Whether you have a physical location or an online store, general liability insurance can protect you against financial loss related to a lawsuit.

Not all general liability insurance policies are created equal, however, and these policies won’t cover everything. Important aspects covered by general liability insurance include: a man standing in front of a building

Medical Payments

General liability insurance can cover medical bills for someone injured on the business’ property. This includes emergency medical services, medical treatment, hospital visits or stays, surgery, disability benefits and, in extreme cases, death benefits.

These expenses are compensated as they arise. As most injuries are ongoing or require ongoing treatment, this insurance will be paid as the costs pop up. A business owner may then file a claim on their general liability insurance policy to offer compensation to the victim. This is especially important, as offering this compensation immediately may help avoid a lawsuit in the future. This doesn’t mean that a lawsuit won’t occur, however.

Compensation also depends on the type of medical payment. Disability benefits may be paid on a consistent basis, such as if a victim is rendered permanently disable by an accident, while a death benefit would be a lump sum paid directly to the victim’s family.

Property Damage

Say someone’s expensive electronics are ruined as a result of negligence on your company’s behalf. Filing a claim with your general liability insurance policy can help replace or repair the broken electronics in a single lump sum payment.

Legal Payments

In the previous cases, compensation would typically go directly to the victim for their injuries or damages. Legal expense coverage under general liability, on the other hand, goes to the business owner. This coverage offers compensation for expenses related to a lawsuit, including court fees, settlement costs, defense expenses and more. These payments are also provided as they appear.

What is Not Covered Under General Liability

Compensation will only be paid after a general liability claim is approved. This could take up to 30 days after the claim is filed, although this varies. Some states require insurers to approve or deny a claim within a certain amount of time, although insurers will occasionally wait until the maximum number of days to reply to a claim. As soon as a claim is approved, however, you may receive compensation soon after.

General types of covered accidents include slips and falls, ruined belongings, copyright infringement, advertisement theft, landlord property damage and more.

There are certain circumstances in which you may be denied a general liability claim, however. Reasons a claim may be denied include:

Criminal activities (committed by employees or the business owner)
Medical attention was not sought (in case of injuries)
The accident occurs due to professional negligence

Claim exceeds the limit of the policy
The accident is not covered
Fraudulent claims

Say one of your employees causes bodily injury to someone else while committing a crime. This likely will not be covered under your general liability insurance policy. The same applies for accidents that occur due to professional negligence. General liability covers non-professional negligence, meaning other incidents of liability will not be covered. If your business or employees offer specialized services, you will need to purchase professional liability to cover accidents concerning professional negligence.

If a claim is denied, compensation will not be paid out. A denied insurance claim won’t necessarily cause your business to lose its coverage, but frequent fraudulent claims can result in a cancelled policy.

If your business or employees face dangers aside from general liability such as professional liability claims or claims from discontented employees, you may need additional liability insurance such as:

Professional Liability: Professional liability insurance covers claims of professional negligence that may cause a client to lose money. This insurance is also known as errors and omissions insurance or medical malpractice insurance.
Directors and Officers Liability: Directors and officers liability insurance protects key employees of your business from claims regarding their activities on a board. This includes claims from investors, clients, customers and anyone who may have financial stake in the company.
Liquor Liability: Liquor liability insurance covers bodily injury and property damage one of your patrons may cause after purchasing alcohol from your business. If an individual buys beer from your gas station and causes a wreck due to drinking the beer while driving, liquor liability insurance can protect your business from a related lawsuit.
Products Liability: Products liability insurance covers bodily injury and property damage caused by a product sold, manufactured or offered by your business.

When in doubt, speak with an insurance agent and shop around to find the best liability insurance coverage to suit your business’ coverage needs.

No Comments