General liability insurance is a common yet crucial policy designed to cover businesses in case of accidents on and off the property. This coverage covers nonprofessional negligence, meaning negligence that does not relate to a professional service.
For example, say there is a large spill on the floor of your restaurant. The server who caused the spill leaves to fetch a wet water sign. Before they’re able to come back, an elderly guest leaving the bathroom slips in the spill and falls, injuring their hip and wrist. In this case, general liability insurance should step in to cover your business. It can help with compensation for the guest’s medical bills as well as cover a lawsuit in case the guest files a lawsuit for additional damages.
Another example is if you or an employee cause property damage to someone else. Say an employee visits a client for a consultation. As they leave, they accidentally knock a valuable clock off the client’s wall and smashes it. General liability insurance should cover the damages and protect your business (as well as the employee) against a lawsuit.
Who Does General Liability Insurance Cover?
General liability insurance primarily covers the business and the policyholder, although employees can also be covered. If an employee is sued for a work-related accident (that is not related to a professional service), they should be covered under their employer’s general liability insurance policy.
What Does General Liability Insurance Not Cover?
Unfortunately, general liability insurance doesn’t cover everything. It is important to keep the limitations of such a policy in mind so that you are not blindsided with a denied claim. Common exclusions on general liability insurance include:
- Professional negligence
- Injuries or damages that occur because an employee is under the influence of drugs or alcohol
- Employee injuries
- Intentional injuries or damage
- Accidents that occur while the business or its employees are committing a crime
As with other policies, general liability insurance is subject to claim limits either for a single claim or annual claims. Adjust your general liability insurance policy to fully protect your business from dangers it may face during a full year of operation.
Be sure to speak with an insurance agent about adding insurance to your business policy. While general liability insurance is crucial, most businesses also need additional liability coverage for claims concerning employees, professional negligence and more.
Also Read: What Are Workers Compensation Boards?
Get A Quote