Most business owners buy general liability insurance to protect their bottom lines from third party negligence claims. It can help a business avoid hardship if it has an obligation to repay someone it harmed. Often, it provides five types of coverage for liabilities common in most businesses.
Let’s take a closer look.
What is liability insurance?
General liability coverage insures a business in case it makes mistakes that harm others. The idea behind it is that mistakes can happen at any moment that might harm clients or other people who don't work for you. You should therefore have a resource available to compensate this person for their losses. However, you shouldn't suffer a significant financial blow in the meantime.
The 5 Types of General Liability Insurance Claims
Under general liability insurance, you usually have coverage for five types of claims:
1. Bodily Injuries
A customer could get hurt simply by setting foot in your business. For example, they might slip and fall on a wet spot in your grocery store’s freezer aisle. Because the injury occurred on your property, they might feel that you owe them for their medical bills, lost income or other financial challenges. They might sue you for their losses, too. General liability insurance can help pay these expenses.
2. Property Damage
When you provide a service to others, you could damage their property. For example, a painter hired to spruce up someone’s downstairs might spill a solvent that damages the carpet. This could lead to a very dissatisfied client. Because the business caused the damage, they might have to pay for the cleanup and carpet replacement through their liability coverage.
3. Personal Injuries
Businesses must uphold certain ethical standards in their advertising and customer interactions. If they ever disrespect or share sensitive information about a client or competitor, then that party might claim that they libeled, slandered or otherwise caused them reputational harm. General liability policies can help fight these claims. They can also cover claims of advertising injuries or copyright infringement.
4. Product Liabilities
If you make a certain product, then unforeseen issues with that product could harm someone. As a result, most general liability policies will cover property damage and bodily injuries caused by your products.
5. Completed Operations Liabilities
Like product liabilities, a business’s services might also harm a client. Say, for example, that you complete electrical work in someone’s home that later causes a house fire. Even though you long since completed the job, it still caused a problem. Completed operations liability coverage can help you repay the affected party.
Don't forget, however, that though general liability policies usually cover several types of liability claims, they will not cover every liability. As a result, you might have to buy additional coverage to augment your exiting protection.
Your commercial insurance agent is committed to helping you choose the most appropriate liability coverage for your operations. Don’t hesitate to work with one of our agents to find perfect coverage solutions.