In the modern society, a small accident can result in 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’s facing case for damages it could or may not have inflicted upon a person though injury or property damage.

General liability insurance can be bought independently or within a BOP (Business Owners Policy). A Business Owners Policy packs liability and property insurance right into a single policy. Public and Products Liability insurance , however, are often quite low. Businesses needing a larger coverage usually buy liability insurance being an independent policy.

In a general liability insurance coverage, legal costs of a small business in a covered liability lawsuit have to be paid by the insurer. Covered liability claims include property damage, bodily injury, personal injury and damages from false advertising, also called advertising injury. Insurance companies also cover general and compensatory damages. However, liability insurance policies do not cover punitive damages, because they are deemed punishment for deliberate actions.

General liability insurance policies always declare a maximum amount that insurers have to give during the policy period. Under the policy, there is also a maximum amount that the insurer has to pay per occurrence. For example, 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 rest should be paid by the business enterprise company.

As a cover against these types of circumstances, companies buy umbrella liability insurance, which makes the picture where general liability coverage stops. It covers payments that go beyond the company’s policy’s limits and gives 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 have to help in the investigations, forward legal notices, etc.

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