What does general liability insurance cover?

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Bodily injury and property damage liability

General liability covers business related incidents that result in bodily injury to a third-party. This can include a customer slipping and falling on our premises, or an employee accidentally dropping a toolbox on someone’s foot. Of course, this coverage only applies to non-employee injuries.

Additionally, general liability protects any third-party property damage resulting from our business operations. For example, a landscaper’s policy may cover a stone that kicks up from their lawn mower and breaks a client’s window.

 

Products - completed operations

General liability insurance coverage includes liability protection for both products and completed operations exposures. Products are any goods that a company manufacture, sell, or distribute in their business. If a product causes physical injury or illness, such as a customer becoming sick from undercooked food, a business can find protection under this coverage.

Alternatively, completed operations protects against faulty services or work performed by a business. A project must be fully complete for coverage to apply. For instance, a customer hires a plumber to install a shower drain as part of a bathroom renovation, but the plumber didn’t seal the drain properly and the bathroom flooded days later. The plumber’s general liability policy can cover up to his liability limits for his faulty workmanship since the incident occurred after he left the premises.

 

Personal and advertising injury

Not all injuries are physical. Any written or verbal communications that cause harm can also be covered under your general liability policy. This encompasses libel, slander, malicious mischief and copyright infringement, to name a few. For example, a small business retailer suffers a decrease in business after a local competitor starts a rumor about their bad customer service. The small business owner can sue the competitor for personal and advertising injury for damaging their reputation and profitability.

 

Medical payments

Medical payments cover any non-employee medical or funeral related expenses for which your business is responsible. Of course, your coverage depends on your selected limits. For example, a shelf falls on a customer while they’re grocery shopping. Their medical expenses total $10,000, but the grocer’s liability insurance covers only $5,000 toward medical payments. In this case, the store would be responsible for paying the remaining $5,000 out-of-pocket.

 

Damage to premises rented to us

General liability coverage typically includes coverage for any damages to non-owned land, buildings, or structures. The insured, or their business, must be legally liable for the damages for coverage to apply. For instance, a local restaurant rents property that catches fire due to a negligent employee leaving a frying pan unattended. General liability might cover the damages since the business caused the fire. In contrast, this coverage wouldn’t apply if a lightning strike started the fire.

 

What general liability doesn’t cover

You might have additional insurance needs that aren’t covered by general liability insurance. There are many other products available to protect your business. Here’s a short list:

Owned commercial property 

Employee injuries 

Professional mistakes 

Commercial vehicles