In the modern society, a small accident can result in protracted and potentially money- sapping lawsuits. General liability insurance, therefore, becomes a necessity for most companies. General liability insurance protects a company’s assets when it is facing a lawsuit for damages it could or might not have inflicted upon a person though injury or property damage.

General liability insurance can be purchased independently or within a BOP (Business Owners Policy). A SMALL BUSINESS Owners Policy packs liability and property insurance right into a single policy. The liability insurance coverage limits, however, are usually quite low. Businesses needing a greater coverage usually buy liability insurance as 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, accidental injury and damages from false advertising, also called advertising injury. Insurance firms 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 need to give through the policy period. general liability insurance Beneath the policy, there is also a maximum amount that the insurer has to pay per occurrence. For instance, if a company includes a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance provider is obligated to cover just the $1.5 million; the rest must be paid by the business company.

As a cover against these kind of circumstances, companies buy umbrella liability insurance, which comes into the picture where general liability coverage stops. It covers payments that exceed the company’s policy’s limits and gives extra protection for liabilities not covered in the standard insurance policy.

Generally, there is a requirement for the policyholders to are accountable to the insurance company as soon as an accident that can result in a liability claim has taken place. The business owner will have to assist in the investigations, forward legal notices, etc.