What is General Liability Insurance?
General liability (GL) insurance in the most important coverage a business can obtain. It is required by law in most states as well as by landlords, banks and third-parties. GL insurance offers protection against lawsuits, bodily injury, property damage, personal injury and completed work. There are two components to general liability insurance, public liability and product liability. Basically, public liability protects you against any third-party, such as customers, filing suit against your business, whether they slipped and fell in your store or trespassed and damaged your property.Product liability protects your products or completed work, such as cabinets your business installs in a customer’s home. If those cabinets are installed incorrectly, or fall and cause bodily injury or property damage for another reason, your business can be held liable. The average premises liability settlement awarded in 2015 was nearly $700,000.1 A premises liability claim can be as simple as a slip and fall or more complicated as in elevator or escalator accidents. In most cases, claims can be avoided by taking simple precautions, such as using signage that says “wet floor” or “out of order.”
General liability insurance, in its most basic form, will cover the cost of investigating claims and defending against third-party lawsuits. It pays lawyer fees, court costs, witness fees, settlements and court-ordered judgments. Some medical expenses may be covered as well as repair or replacement of damaged property.
1As reported by the Insurance Information Institute.