General Insurance
General liability insurance is basically insurance designed to protect business owners and operators from a wide variety of liability exposures. A type of commercial insurance, general liability insurance covers financial losses arising from any physical or bodily injury, property damage or advertising damage caused by the insurer or the employees of his company. In simpler words, liability insurance protects the assets of your business when you are sued for causing injury or damaging property, etc.
How it works?
The insurer is supposed to pay the legal costs of a business in a lawsuit or a covered liability claim under the general liability insurance policy. Personal or bodily injury, property damages, advertising and general damages- all are covered under liability claims. An important point to note is the punitive damages are sometimes not covered in these policies as they are considered to be punishment for an intentional act.
General liability insurance policies always state a maximum amount that you will have to pay during the policy period or in the event of a claim. Sometimes the amount to be paid might exceed the maximum amount covered by the policy. For such a scenario, many companies also purchase umbrella liability insurance which covers the extra amount. For ex if your company is sued for $2million and your policy only covers $1.5 million. Then the remaining $0.5 million could be covered by the umbrella liability insurance.
How to evaluate what’s best for you?
Keep a few basic points in mind while choosing an insurance company. You should definitely go for an insurance company that has sufficient experience in your field of work and who will understand the risks and challenges your business might face. An easy way to go about this is to find out which company is providing liability insurance to your peers or competitors. A good insurance company should be financially stable, should provide you with a large variety of products, even a customized one if you need. They should provide personal support, options of flexible payment and most importantly – A responsive claims service.
The next step is finding a good policy. Remember, there is no “one size fits all” rule here. You have to carefully select a policy according to your particular needs. Keep in mind your company’s revenue and lawsuits history. You also might want to include defense expenses in the policy and exclude punitive damages rewarded to the client.
A very important decision to make is evaluating how much you are going to need. Sometimes a figure as large as $1 million might seem absurd -but if you find yourself sued by a group of people, even the lawsuit might cost a fortune. So think of a practical amount.
Why do you need it?
In this uncertain world, any accident can happen anytime and anywhere, even with your best of precautions. So every business can only benefit from an adequate liability insurance cover. It protects you if a customer gets injured at your workplace and also covers damages caused by your employees.
Commercial General Liability Insurance protects your company against these types of claims. Even if your company is negligent or responsible for damage, injury or loss to another's property, reputation or health, it can keep its assets secured if adequately insured.
Liability insurance is very important for those who may be held legally responsible for the injuries of others, especially medical practitioners and business owners. A well written general liability insurance policy gives you a safety cover and financial freedom but this does not mean that you should be careless. Always maintain a high standard of safety and take extra precautions. Remember better safe than sorry!