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Understand Your Policy: General liability insurance requirements and coverage

Liability insurance is critical for those who are liable and at fault for injuries sustained by other people or in the event that the insured party damages someone else's property. As such, liability insurance is also called third-party insurance.

Liability insurance does not cover intentional or criminal acts, even if the insured party is found legally responsible.

Policies are taken out by anyone who owns a business, drives a car, practices medicine or law—basically anyone who can be sued for damages and/or injuries. Policies protect both the insured and third parties who may be injured as a result of the policyholder's unintentional negligence.

Protect your business and your career. If you are a business owner or a professional, contact our team and get a FREE quote and THE BEST COVERAGE!

Does my business need general liability insurance?

General liability insurance isn't required by law. However, it provides key coverage that could protect your business from bankruptcy if a client sues. Plus, in certain situations, this policy may be required. For example, you may need it for:

● A commercial lease

● A client contract

Because of the high cost of a lawsuit, general liability insurance is recommended for every small business.

What does general liability insurance cover?

General liability insurance covers the most common third-party lawsuits (lawsuits filed by someone outside your business). That includes:

● Bodily injury

● Property damage

● Advertising injury

What does general liability insurance pay for?

A lawsuit can quickly escalate into thousands of dollars in legal costs. If a client or other person outside your company sues, your policy can pay for:

● Attorney's fees

● Court costs

● Court-ordered judgments

● Settlements

What policy limits should I choose?

Most small businesses opt for:

● $1 million per-occurrence limit

● $2 million aggregate limit

● $500 deductible

That means the policy would pay $1 million on one incident, or $2 million on all claims while it’s active. The policyholder would need to pay $500 before getting money back on a claim. Large companies will need more coverage, as their claims could end up costing more.

I'm an independent contractor. Do I still need this policy?

Yes – and it could be required. Independent contractors face the same risks as small businesses. You may need this policy to:

● Protect against lawsuits over an injury

● Protect against lawsuits over property damage

● Fulfill the terms of a client contract

Even if a contract does not require it, it’s still recommended that independent contractors carry this policy.

What are advertising injuries?

A general liability policy includes protection against advertising injuries or damage caused by a business’s advertising. That includes:

● Spoken defamation (slander)

● Written defamation (libel)

● Copyright infringement

● Violations of privacy

For example, a general liability policy would help pay for a lawsuit over a social media post that damaged a competitor. It would also provide coverage if a customer sued because you used a photo of that person without permission.

Protect your business and your career. If you are a business owner or a professional, contact our team and get a FREE quote and THE BEST COVERAGE!

-------------------------------------- EPIA inc. is a private Insurance Agency with no ties with legal entities. The information contained in this article is based on information provided by the Medicare Official Website.

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