In the modern society, a little accident can result in protracted and potentially money- sapping lawsuits. General liability insurance, therefore, becomes a necessity for most companies. General liability insurance protects a company’s assets when it’s facing a lawsuit for damages it could or may not have inflicted upon a person though injury or property damage.
General liability insurance can be bought 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 as an independent policy.
In a general liability insurance coverage, legal costs of a business in a covered liability lawsuit must 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 firms also cover general and compensatory damages. However, liability insurance policies do not cover punitive damages, as 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, there is also a maximum amount that the insurer must pay per occurrence. For Market Traders Insurance , if a company includes 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 rest needs to 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 go beyond the company’s policy’s limits and provides extra protection for liabilities not covered in the typical insurance policy.
Generally, there is a requirement for the policyholders to report to the insurance company as soon as an accident that can lead to a liability claim has had place. The business owner will have to assist in the investigations, forward legal notices, etc.