All businesses, regardless of size and operation, need and should have a general liability insurance policy. This type of policy is designed to protect the business, otherwise known as the insured, from lawsuits or claims arising from an insured’s liability due to property damage or bodily injury. The general liability insurance policy is designed to cover non-professional negligent acts. The definition of negligent is the failing to take proper or normal care of something or someone.
A general liability policy generally includes four types of coverage: Bodily Injury and Property Damage Liability; Personal Injury Liability; Medical Payments; and Tenants Legal Liability. The following describes how each of these coverages operates and why it is important to have them.
The Bodily Injury and Property Damage coverage protects a business from liability for physical injury to a client or customer or potential damage to their property. In the event of such physical injury to body or damage to property, money damages could be awarded against the insured to compensate the injured party. A general liability insurance policy will provide funds to pay the damages, as well as provide a defense to any lawsuit.
The Personal Injury coverage includes claims such as libel, slander and defamation of character. The policy will provide protection for claims of damage to a party’s reputation.
The Medical Payments coverage is designed to pay for an individual’s medical expenses as a result of an accident at the business premises. This coverage supplements the Bodily Injury and Property Damage coverage.
The Tenant’s Legal Liability coverage was formerly known as Fire Legal Liability and is coverage for those who rent or lease the space that the business occupies. This type of coverage provides protection in the event of damage to the leased premises. Please note that this coverage only pays for damage to the leased premises and does cover the personal property or inventory of the business.
A general liability policy will have a per occurrence limit of liability, as well as an aggregate limit of liability. In addition, the policy may have a deductible built in for any bodily injury or property damage. Most policies are rated on a class code which best suits the operation of the business. On each class code, the rating basis is derived from sales or revenue.
Keep in mind that there are several items that are not included under the standard general liability insurance policy that may usually be found in a different policy form. Some of these items are employee injuries, professional liability coverage, anything related to auto insurance, intentional acts, and anything related to your workmanship. Most of these items are generally excluded under the standard general liability policy because they can be purchased in another form of insurance coverage that is better suited.
RMC Group can answer any questions that you might have and help you better understand general liability coverage for you and your clients. If you would like additional information or a quote, please contact our office at 239.298.8210.