In the modern society, a little accident can lead to protracted and potentially money- sapping lawsuits. General liability insurance, therefore, becomes essential for some companies. General liability insurance protects a company’s assets when it is facing case for damages it could or might not have inflicted upon an individual though injury or property damage.
General liability insurance can be bought independently or as part of a BOP (COMPANIES Policy). A Business Owners Policy packs liability and property insurance right into a single policy. The liability insurance plan limits, however, are usually 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 small 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 known as advertising injury. Insurance companies also cover general and compensatory damages. However, liability plans 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 through the policy period. Beneath the policy, gleam maximum amount that the insurer has to pay per occurrence. For instance, if a company includes a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance company is obligated to cover just the $1.5 million; the others has to be paid by the business company.
As Public and Products Liability insurance against these types of circumstances, companies buy umbrella liability insurance, which comes into the picture where general liability coverage stops. It covers payments that exceed the company’s policy’s limits and provides extra protection for liabilities not covered in the typical insurance policy.
Generally, there is a requirement of the policyholders to report to the insurance company when an accident that can lead to a liability claim has had place. The business owner will then have to assist in the investigations, forward legal notices, etc.