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General Liability is a broad term that refers to a package of coverage and different coverage limits. Any commercial entity who owns or rents buildings, manufactures goods/products or gives services to its customers is going to have general liability exposure.
General liability to commercial entities to indemnify the business for third-party liability claims. On the most rudimentary level the Commercial General Liability (CGL) policy covers against lawsuits claiming bodily injury, personal injury, and property damage because of negligence on the part of the insured. The insured is the entity and/or person shown on the policy along with some other people such as employees, etc.
What General Liability Coverage looks like?
Most Commercial General Liability policies might appear something like this when you look at the coverage page:
General Aggregate Limit $2,000,000
Product and Completed Operations Limit $2,000,000
Personal and Advertising Limit $1,000,000
Each Occurrence Limit $1,000,000
Fire Damage $50,000
Medical Expense $5,000
So, what does all this mean?
General Aggregate Limit
This is the most common that any insurance company will pay for claims which arise out of your operations, personal or advertising injury, fire damage and/or medical payments. The operation’s coverage is the basic coverage for bodily injury and property damage due to your negligence.
Product and Completed Operations Limit
This coverage offers protection for all those who are contractors or manufacturers. For instance, if you are an electrician and you fix someone’s lights and their house burns down. There can be legal action for you for your negligence. This is a separate aggregate limit and claims of this nature are not going to lessen the General Aggregate limit. However, they will still be subject to the per occurrence limit for each claim.
Personal and Advertising Injury Limit
Personal injury includes defamation, character assassination, invasion of privacy and slander. Advertising injury is the false advertisement practices. This type of coverage offers protection from lawsuits related to any of the incidents mentioned above. Personal and Advertising Injury Limit policy is going to pay for any one claim of this specific nature.
Do I need General Liability Insurance?
You cannot predict every bump in the road ahead of you, but you can evaluate how much general liability insurance you may need. It is all about understating your business and all the several factors influence your coverage level. While calculating the amount of insurance you plan to buy, consider the following important questions:
What kind of business do you own?
How huge is your business?
Who are your clients?
Where is your business situated?
How many workers do you have?
How experienced are your workers?
Where is your business lodged?
Do you have sole proprietorship?
The more risks that you take on, the more coverage you might need. As your business vicissitudes and grows, you may also find that your insurance needs will grow as well. This means that you are going to need insurance with a larger reach. Monitor your business operations to figure out which areas would result in more liability.