Liability Insurance

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In the course of conducting your business, you interact with a multitude of people: employees, contractors, clients, vendors, and many others. Most of the time things go along nicely from day to day. But, any one of the many people you interact with could claim that your business caused them injury or loss and take legal action against you. You may need to defend yourself against claims of property damage, bodily injury, libel, slander, or something else. And this is why you need General Liability Insurance, which would provide you with the necessary coverage and protection against claims against your business. After all, accidents happen – on site, off site, with employees, vendors, clients and others. Liability insurance can help cover medical expenses, attorney fees and damages for which you are legally responsible. It can also offer protection against situations that may not have even crossed your mind.

What Is General Liability Insurance?

General Liability Insurance protects business owners from claims of injury, property damage or negligence related to their business activities. Liability insurance is a very important protection for those who may be held legally liable for the injuries of others, especially medical practitioners and business owners. The indemnity provided by a liability insurance policy helps business owners cover the costs associated with mounting a legal defense. Liability insurance policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable.

Many business owners find that their clients require them to have General Liability Insurance (sometimes referred to Commercial General Liability, or CGL, insurance) before they’ll sign a contract. This means that having the right coverage in place can make a significant difference in a business owner’s ability to land clients and bring in revenue. General Liability Insurance policy protects your business by providing the financial resources necessary to keep it operational when unexpected events arise that could deplete your operational funds.

Typical Costs Covered by General Liability Insurance

A general liability insurance policy provides financial protection from the risks that any business owner, no matter how careful, might incur. A typical policy covers the following expenses:

  • The costs of defending or investigating a suit or claim against you, including court costs, witness fees, attorney's fees, and police report costs
  • Reasonable expenses incurred when the insurance company asks you to assist in your defense
  • The premium on a court-mandated bond connected with a liability suit
  • Judgments or settlements resulting from covered suits, including interest required on the judgment and the injured party’s medical expenses, in the event your defense is unsuccessful

Who is Protected by General Liability Insurance?

A general liability policy insurance policy covers you, as well as many of the other people involved in your business:

  • For joint ventures or partnerships, all of your partners, members, and their spouses are protected if they are sued for something they do in an official capacity related to your business
  • For corporations, your policy covers all of your business’s executive officers, stockholders and directors while they are acting in their official capacities
  • If you have subsidiaries, your policy’s liability coverage extends to any subsidiary where you own at least 50 percent of the stock
  • Your policy protects your employees from claims that result from actions they take in their capacity as employees
  • In the event of a written agreement indemnifying a person or organization, such as a vendor, that person or organization would be protected against liability claims for property damage or bodily injury as a result of selling or distributing your products
  • During the first 90 days after you acquire a new business, it is automatically covered by this policy. After the first 90 days, you would need to update your policy to continue this protection
  • Anyone legally associated with your business, including volunteers operating under your direction, are covered for liabilities that result from the work they perform for you, and for the use or maintenance of your property that is in their care

Additional Coverage Offered by General Liability Insurance

Advertising Injury

In the event you are sued over something that happens while advertising your company's products or services, your business liability insurance protection will cover the claim. Advertising injuries can stem from:

  • Publishing, verbally or in writing, false information that libels or slanders another person or organization
  • Publishing material that violates an individual’s privacy rights
  • Copying another company's style of doing business, or advertising concepts
  • Infringing on another business’s title, copyright or slogan

Bodily Injury

Although it may be hard to imagine how your business could cause another person serious harm or even death, but in the event that it did, your general liability policy would provide for:

  • Medical care costs
  • Loss of services
  • Court-awarded compensation for deaths that result from an injury

Contractual Liability

Your general liability insurance coverage provides for any liability you might incur when you enter into various contracts, such as:

  • Building leases
  • Easement-of-license agreements
  • Elevator maintenance agreements
  • Agreements to indemnify a municipality, if required by municipal ordinance

Fire, Explosion, or Lightning Damage

The property insurance section of your general liability insurance covers damage caused to other people’s property as a result of fire, lightning, or explosion, originating from your business property whether you own or rent it. This coverage even applies to other areas in your building that may be damaged as a result of negligence on your part. For example, an explosion in your office on the building’s first floor causes damage to another company’s offices above. Your liability policy will pay for the damage to the upstairs office.

Hired Auto and Non-owned Auto

Many businesses add the “hired auto and non-owned auto” insurance option to their general liability policy. If you don’t have any vehicles in your company’s name, this option meets the requirements of any contract that requires you to have commercial auto coverage.

This coverage also allows you to save money when you rent a car in your company’s name, but only applies to the liability part of the rental car contract. Since this option does not cover physical damage to the rented vehicle, you’ll still need to purchase damage insurance from the car rental agency if you want to be fully protected.

If you or an employee is driving a personally owned vehicle on company business, and an auto accident occurs, non-owned auto coverage protects you should the company be sued. But, the policy does not cover a suit against you or your employee personally – that would be covered by a personal auto policy.

Legal Defense Expenses

When a suit is filed against your business, you immediately begin to incur legal expenses. Even if your company is ultimately found not liable for a claim, the process of mounting a defense is expensive without insurance. A business liability insurance policy will generally pay for:

  • Costs associated with the defense or investigation of a suit or claim against you, including court costs, witness fees, attorney's fees, and police report costs
  • When the insurance company asks you to assist in your defense against a claim, it will pay your reasonable expenses, such as the loss of your income for a day in court
  • Insurance covers any judgments or settlements resulting from covered suits, including interest required on the judgment and the injured party’s medical expenses, if your defense is unsuccessful
  • A court required bond to ensure you can pay a potential judgment in a liability suit, is covered by your policy and the insurance will pay the premium for the bond

Liquor Liability

If you’re not in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages, your general liability insurance policy will protect you if are held liable for a liquor-related accident. If you occasionally distribute alcoholic beverages -- at a company event or office party – you would be covered - as long as you do not charge money for the alcohol dispensed.

Medical Payments

If a person is injured, either directly by you or at your place of business, your general liability insurance coverage would pay for medical expenses incurred within a year of the accident. In the event of a death, then funeral expenses would be covered. For example, if one of your clients slips and falls at your office and requires medical treatment, your policy would cover the cost of that treatment. However, policy limits apply.

Personal Injury

Personal injury is the part of the commercial general liability policy that protects you if someone claims that your business caused damage that isn’t physical in nature. In the following examples, most liability policies would protect you against any lawsuits related to:

  • Publishing, in writing or verbally, false information that libels or slanders an organization or person
  • Publishing material that violates someone’s privacy rights
  • Maliciously prosecuting someone
  • Evicting someone wrongfully

Products-Completed Operations

Commercial general liability insurance policies generally include liability protection for services or products completed by your company. That is if something your company manufactures or a service your company provides causes an injury, your policy would pay for any resulting legal expenses and damages up to your policy's limit.

Property Damage

Even if it is difficult to imagine, it is possible that something your business does – or something it doesn't do – could damage another person’s property. In cases like this, your business liability insurance coverage compensates for:

  • Physical damage to the property, or
  • Loss of use of the property

Property damage liability coverage often does not cover damage caused to client property you are working on or have in your possession. You will need additional insurance to cover this.


General Liability Insurance & the Business Owner’s Policy (BOP)

For many business owners, general liability insurance can be handled through an insurance package called a business owner’s policy, or BOP. A business must meet certain criteria in order to qualify for a BOP, which offers the kinds of insurance business owners most commonly need in one pre-packaged policy. Contact us to learn more about BOP policies.



Product Liability Insurance

Product Liability Insurance Coverage covers the business owner in the event that a suit arises out of the use of the insured's products. This can include loss to personal property, business property, injury or death. The insured’s products may be clothes, toys, tools, building materials, electronic devices or even pet supplies.

What does Product Liability Insurance cover?

Typically, damages, legal defense fees and settlement charges are paid by the insuring company when a claim is filed against the insured business as a result of a Product Liability Suit. Product liability insurance will cover the insured for suits that arise out of damage or injury from the use of a product that the business owner manufactures or sells.

Who Should Have Product Liability Insurance?

Any business that is responsible for the design, manufacture, sale or distribution of a component or end-user product. This includes any business or individual that manufactures its own product or if the product's manufacturing is subcontracted out by another operation, even if the operation is overseas.

If you are interested in quick, no obligation insurance quotes, please call 847-441-9222. Or, e-mail us at rich@unifiedinsurance.com.