Almost every organization has general liability loss exposures. What is general liability loss exposure? It is the possibility that an organization will be held legally or financially responsible for injury, harm, or damage to another party.
Common Types of General Liability
Here are the most common types of general liability exposures and potential consequences.
- Premises Liability—Premises liability exposure refers to an organization’s responsibility for third-party injuries that happen on property owned or occupied by an organization due to a dangerous condition (i.e., tripping and hurting themselves at the store).
- Operational Liability—Operations liability exposure refers to an organization’s liability for bodily injury or property damage resulting from their ongoing operations.
- Products Liability—Products liability refers to the loss exposure an organization faces because of manufacturing, distributing, or selling an unsafe or defective product. Any organization that makes or sells products is at risk.
- Completed Operations Liability—Completed operations liability exposure refers to injuries or damages incurred by a third party resulting from work (including construction work) that has been finished, turned over to the purchaser or client, and/or put to its intended use.
- Contractual Liability—Contractual liability exposure refers to claims that an organization has failed to fully perform the terms of a written contract or other agreement.
What Happens If There is a Loss?
In the event of a loss, organizations may face a variety of consequences, such as:
- Damages—If a court finds that an organization is responsible for a loss, it may have to pay money damages to the harmed or injured party.
- Defense Costs—Whether or not an organization is found liable, it will have to pay legal defense costs, including attorneys’ fees and other costs associated with the claim.
- Reputational Harm—An organization may experience reputational harm, including but not limited to the loss of business, decreased employee retention, and a loss of consumer loyalty and investor trust.
For further guidance on reducing liability loss exposures, contact RMC Group today and speak with a licensed Insurance Agent. Our offices can be reached at 239-298-8210 or rmc@rmcgp.com.
This document is merely a guideline. It is not meant to be exhaustive nor be construed as legal advice. It does not address all potential insurance or compliance issues. Consult your licensed insurance representative or legal counsel to address possible compliance requirements. © 2022 Zywave, Inc. All rights reserved.