As a business owner, you face risks every day. Accidents happen, property gets damaged, and sometimes legal claims arise. General liability insurance is a crucial safeguard that protects your business from the financial impact of these unexpected events. But what exactly does general liability insurance cover?
At White Slate Insurance, we understand how important it is to have the right coverage in place. In this blog post, we’ll break down the key areas that general liability insurance protects, so you can feel confident that your business is prepared for the unexpected.
1. Bodily Injury
One of the main protections offered by general liability insurance is coverage for bodily injury claims. If someone (a customer, vendor, or visitor) is injured on your business premises or as a result of your business operations, your general liability policy helps cover medical expenses and legal fees if you’re sued.
Examples of what’s covered:
- A customer slips and falls in your store, resulting in an injury.
- A delivery person is injured while dropping off supplies at your warehouse.
- An individual attending a business event you hosted gets hurt due to unsafe conditions.
In any of these cases, general liability insurance can cover medical bills, legal defense costs, and any settlements or judgments if you’re found liable.
Why it’s important:
Accidents can happen in any business, no matter how careful you are. Without general liability coverage, you could be responsible for paying costly medical expenses and legal fees out of pocket.
2. Property Damage
General liability insurance also covers property damage that your business may cause to someone else’s property. This coverage is essential for businesses that work at client sites or have physical interactions with customer property.
Examples of what’s covered:
- An employee accidentally damages a client’s equipment while working at their office.
- Your plumbing business accidentally causes water damage while fixing pipes at a customer’s home.
- A contractor’s machinery damages a neighboring building during a construction project.
In situations like these, general liability insurance can cover the repair or replacement costs of the damaged property, as well as any legal claims made by the property owner.
Why it’s important:
Even minor property damage can lead to expensive repairs or replacements. Having general liability insurance ensures that your business is protected from these costs, so you can continue operations without financial strain.
3. Legal Defense and Lawsuits
One of the most important benefits of general liability insurance is its protection against lawsuits and legal claims. If your business is sued for bodily injury, property damage, or other covered claims, general liability insurance covers the cost of your legal defense, even if the claim is groundless.
Examples of what’s covered:
- A customer sues you, claiming that your product caused them physical harm.
- You’re sued after an employee damages a client’s property.
- A visitor to your business premises sues for injuries they suffered in an accident.
Your general liability insurance can help cover the costs of hiring attorneys, court fees, settlements, and judgments, saving your business from potentially crippling legal expenses.
Why it’s important:
Lawsuits can be costly, even if the claims are unfounded. Legal fees alone can add up quickly, and settlements or judgments could severely impact your business’s financial health. General liability insurance protects you from these risks.
4. Advertising Injury
General liability insurance also covers claims related to advertising injury, which includes damages resulting from slander, libel, copyright infringement, or false advertising. If your marketing or advertising efforts inadvertently cause harm to another business or individual, your policy can help cover the legal costs.
Examples of what’s covered:
- A competitor claims your advertising falsely disparages their brand, leading to a lawsuit.
- Your marketing campaign unintentionally uses copyrighted material without permission.
- An individual sues your business for invasion of privacy in your advertising efforts.
In these cases, general liability insurance can cover legal defense fees and any settlements or damages awarded by the court.
Why it’s important:
In today’s fast-paced digital world, advertising claims can arise unexpectedly. Having coverage for advertising injury helps protect your business’s reputation and finances from lawsuits related to your marketing activities.
5. Personal Injury
General liability insurance also provides coverage for personal injury claims, which involve non-physical harm to an individual, such as defamation, invasion of privacy, or wrongful eviction. If someone claims that your business’s actions caused emotional or reputational harm, your policy can help cover legal fees and damages.
Examples of what’s covered:
- A customer claims that your business’s actions resulted in defamation, damaging their reputation.
- A tenant sues you for wrongful eviction from a property your business manages.
- A competitor alleges that your business spread false claims about them, leading to a lawsuit.
In these situations, general liability insurance protects your business from the financial impact of legal disputes and settlements.
Why it’s important:
Personal injury claims can be complex and difficult to navigate. General liability insurance offers peace of mind by covering legal costs associated with defending your business against such claims.
What General Liability Insurance Does Not Cover
While general liability insurance provides broad protection, there are certain areas it does not cover. It’s important to understand these limitations so you can consider other types of insurance that may be necessary for your business.
General liability insurance does not cover:
- Employee injuries: You’ll need workers’ compensation insurance to cover workplace injuries to your employees.
- Professional errors: If your business provides professional services, errors and omissions (E&O) insurance is necessary to cover claims of negligence or mistakes.
- Damage to your own property: Commercial property insurance covers damage to your business’s own property and equipment.
- Auto Accidents caused in the course of business: Commercial Auto insurance covers accidents involving autos in the course of business whether they are owned by the business or not owned by the business.