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What does general liability insurance cover?

With general liability insurance coverage, your business is protected from claims by your client. You’re covered against claims of property damage, bodily injury and associated medical costs, advertising slander, and product liability.

 

Also known as commercial liability insurance or business liability insurance, this type of policy covers medical and legal expenses in the event of a claim. If you’re sued, your insurance also covers the costs of the lawsuit.

 

This is the type of insurance that Jones offers.

What's Covered?

General liability insurance is very broad. Let’s go through some of the things that are covered.

 

Property Damage

You business will be protected if you or one of your employees causes damage to another person or company’s property. The expenses to repair or replace the damage property will be covered by your insurance policy.

 

Do note that general liability covers damage only to third-party property, not your own property. To protect your own property, you could consider commercial property insurance.

 

Bodily Injury

Commercial liability policies will also protect you in the event that a third party suffers a bodily injury on your property or as a result of your business operations.

 

Bodily injury could be something that just happens to take place on your property, like someone tripping on the edge of a rug in your store. It can also be something that is a result of your work. For example, if you are an electrician and you have open wires on a site during your work and your client touches them during a walkthrough and is injured, you would be responsible but you would also be covered by your general liability policy. This is very common and is the reason that general liability insurance is especially critical for tradesmen.

 

Once again, note that you and your employees are not covered by this policy. To protect yourself against claims by employees, you will need to provide workers’ compensation.

 

Personal Injury

While bodily injury and property damage coverage deals with accidents, personal injury (as well as the following section on advertising injury) handles claims against intentional acts.

 

Among the area covers are libel and slander, which are reputational injuries, or injury to a person or company’s image or standing. Libel is the propagation of a false statement about a third party in written or electronic form, while slander is a false verbal statement.

 

Additional areas covered by personal injury include false arrest, malicious prosecution, wrongful eviction/entry and invasion of privacy.

 

Advertising Injury

While related to personal injury and often lumped together in policy details, advertising injury handles offenses in connection with the advertising of your goods or services. In the event that in promoting yourself and your business you engage in libel, slander, invasion of privacy, copyright infringement or misappropriation of advertising ideas, your policy will cover any claims made against you.

 

Product Liability

This part of the policy covers you against property damage or bodily injury that occurs off your premises, but caused by a product that you manufacture, distribute or sell.

 

If a customer buys your product and it causes illness or injury, you may be sued for lost wages, medical expenses or other damages. This policy will cover your legal fees and any compensation pay-out.

 

Completed Operations

This part of the coverage is basically product liability for tradesmen. If you completed a project, but some part of your work causes property damage or bodily harm.

 

For example, if you are an electrician and a fixture that you mounted falls onto someone and injures them, you would be responsible, but you would also be covered by your general liability policy.

 

Legal Defense

In any of these cases, if your company is sued in relation to a claim that is covered by your policy, in additional to the pay-out being covered, your company’s legal defense will also be included in your coverage.

What's Not Covered?

While business liability insurance is quite broad, of course not everything can be covered. Typically not included in the policy are:

 

  • Your own property
  • Vehicles, boats and airplanes
  • Property damage or bodily harm caused intentionally
  • Liability as a result of criminal activity
  • Employee injury (as discussed, this is covered by workers’ comp)
  • Professional errors (covered by professional liability insurance)

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