General liability insurance is a useful policy that all business owners should carry in the event of accidents and lawsuits. But unfortunately, general liability insurance alone can't cover everything. It only covers three main areas:
- Bodily Injury
- Property Damage
- Personal or Advertising Injury
This insurance provides compensation for victims of injury and helps the business with legal expenses if a lawsuit arises from an accident concerning nonprofessional negligence. Personal or advertising injury covers expenses related to libel, slander and copyright infringement. But it doesn't cover the following instances.
General liability insurance covers nonprofessional negligence, meaning accidents that result in bodily injury or property damage that do not directly result from a specialized service. Professional negligence, on the other hand, deals with accidents concerning professional negligence that can result in clients losing money. These incidents can be covered under professional liability insurance rather than general liability.
Accidents involving employee injuries are not covered under general liability insurance. If an employee is injured on the job, the accident (and any resulting lawsuit) should be covered under workers compensation insurance. Workers compensation provides monetary assistance for injuries, lost wages or disabilities.
Property Damage To The Business
Since general liability insurance is primarily geared toward damage and accidents concerning other people and businesses, it does not cover damage to the actual property. Any property owned by the business should be protected under a commercial property insurance policy. This type of insurance can protect the business' physical assets from loss or damage due to fire, lightning, wind, hail, explosions, theft or vandalism.
Commercial Vehicle Liability
Commercial vehicles owned and used by businesses should be protected by insurance, but general liability insurance does not cover accidents involving these vehicles. Instead, commercial vehicles should be covered under a commercial auto insurance policy.
Just because general liability insurance doesn't cover everything doesn't mean you have to purchase each of these insurance policies individually. There are ways you can combine coverages under a business owners policy. A business owners policy (BOP) combines general liability insurance and commercial property insurance into a comprehensive policy. These policies can be adjusted to add other important coverages needed to run and maintain a successful business.
Be sure to consider your business' unique risks and insurance needs to make sure you have the right insurance types and amounts for your company or business.
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