General Liability Insurance is part of an insurer’s minimum risk system to protect the insured against the potential risks of lawsuits and other claims brought against the insurer by other parties. When people talk about general liability insurance, they typically are referring to that type of policy that is required by states such as New York, in order to carry auto coverage. Carrying this type of policy will protect an individual against medical expenses, property damage, and wrongful death claims. Liability claims can come in any form. People can be held liable for injuries or property damage that occur on someone else’s property. Liability claims can also be brought against businesses for injuries or property damage that occur on their property.
Many states require that someone purchasing auto general liability insurance purchase legal defense coverage as well. Legal defense covers any costs associated with defending a claim that has been filed against you. These expenses include expert witness fees, depositions, attorney fees, and court costs. Sometimes these costs exceed the amount of coverage that are purchased. Purchasing legal defense covers these costs, so that the person who is insured can have the financial resources to defend any claims against them.
Business owners also need to consider whether there are any special needs related to their businesses that could result in them needing to purchase extra general liability insurance. There are many situations that can arise in which the general liability insurance that would be required by a state may not be enough. One of these situations is when a contractor is working on a large building or piece of property for a business. The contractor could cause injury or death to someone while working on the structure. If the business owner does not have the proper coverage, they could be held financially liable for those injuries or deaths.
Another situation relates to professional services. Many contractors and professionals provide certain types of services that involve their products. For example, roofing services may involve the installation of shingles over a business’s roofs. If an employee or contractor were injured while working on the roof, the business could be held liable. However, if the contractor or professional services provider had adequate general liability insurance, they could be sued for medical expenses and other damages. Having this type of coverage can protect these businesses.
Professional indemnity insurance is another coverage concern for businesses. This insurance protects providers against claims stemming from negligence or damage that was caused in the scope of services that they provide. A general liability insurance policy will not cover any liability resulting from injury or harm that is sustained at the hands of a third party while rendering the professional services that the provider provides.
The third consideration relates to special risks or dangerous activities. In most states, it is illegal to operate a food service establishment if food is present in the establishment at the time of an incident. However, food is only one element of a business, many small business owners don’t realize that they may also be held legally liable for injuries or damage that occurs on their premises. Food service providers should have this type of coverage so that they are protected in the event that they accidentally injure a customer with contaminated food. Many claims that occur at small business establishments are related to tainted food.
Another category of incidents that may require protection from liability include accidents that occur off-site. These claims stem from equipment that is not properly maintained, falling debris, snow and ice, and faulty building materials. Many claims also arise from negligence on behalf of a business owner who has failed to ensure that the property is safe or maintain proper safety measures. General liability insurance will often cover the cost of claims filed as a result of these accidents. It will also cover the cost of repair to property that was damaged as a result of these injuries or defects.
When a business owner chooses to purchase commercial general liability insurance, it is important that they understand the policy because there are a number of policy provisions that can have a significant impact on the outcome of a claim. These questions frequently asked questions are very important in helping the business owner determine which policy is right for them. Frequently Asked Questions (FAQs) about general liability insurance are designed to help the consumer learn more about the various policy options that are available to them. Some FAQs address common claims such as negligence claims, contractor claims, and property damage. Other FAQs address topics that are specific to the business environment, including professional liability, and product liability.