In today’s litigious society, even small mishaps can result in large lawsuits. That’s why General Liability Insurance, along with Property and Worker’s Compensation Insurance, is essential for most companies. Liability insurance protects the assets of a business when it is used for something it did (or did not do) to cause and injury or property damage.

General Liability Insurance can be purchased separately or as part of a business-owner’s policy (BOP). A BOP bundles property and liability insurance into one policy; however, the liability coverage limits are generally pretty low. Businesses that need more coverage usually purchase liability insurance as a separate policy.

Under a General Liability Insurance policy, the insurer is obligated to pay the legal costs of a business in a covered liability claim or lawsuit. Covered liability claims include bodily injury, property damage, personal injury and advertising injury (damage from slander or false advertising). The insurance company also covers compensatory and general damages. Punitive damages aren’t covered under general liability insurance policies because they are considered to be punishment for intentional acts.

General liability insurance policies always state a maximum amount that the insurer will pay during the policy period. Usually these policies also list the maximum amount the insurer will pay per occurrence. For example, if a company has a $1 million occurrence cap in it’s liability policy and it is successfully sued for $1.5 million, the insurer would pay $1 million and the business would be responsible for paying the remaining $500,000.

To cover these types of situations, many companies purchase umbrella liability insurance, which picks up where their general liability coverage ends. Umbrella liability covers payments that exceed their policy’s limits.

Taking precautions before an accident can help keep your liability and insurance rates down. All businesses can take certain steps to lower the chance of a liability insurance claim:

• Set a high standard for product quality control
• Make sure all company records are complete and up-to-date
• Be sure employees are properly trained
• Get safety tips for your type of business from your insurance company.

For more information, please feel free to contact us at 877-9-THE FIG. You can also complete the questionnaire below to be contacted by one of our agents.