Definition
General Liability Insurance is a type of insurance policy that offers coverage to protect businesses against claims of bodily injury, property damage, and personal injury. This insurance covers incidents that arise during normal business operations, including occurrences on the business premises, accidents resulting from products sold or manufactured by the business, and any operational mishaps that cause harm to others.
Examples
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Injury on Premises: A customer slips and falls on a wet floor in a retail store, resulting in an injury. The store’s General Liability Insurance covers medical expenses and potential legal costs associated with the injury.
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Product Liability: A company manufactures a defective piece of machinery that accidentally injures a customer. Liability claims relating to the defective product are covered under the business’s General Liability Insurance policy.
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Advertising Injury: A business runs an ad campaign that accidentally uses copyrighted material without permission, leading to a lawsuit. General Liability Insurance can cover legal fees and settlements.
Frequently Asked Questions (FAQs)
1. Does General Liability Insurance cover employee injuries?
No, employee injuries are typically covered under Workers’ Compensation Insurance, not General Liability Insurance.
2. What is the difference between General Liability Insurance and Professional Liability Insurance?
General Liability Insurance covers claims related to bodily injury and property damage arising from business operations, while Professional Liability Insurance (also known as Errors and Omissions Insurance) covers claims arising from professional services or advice.
3. Can General Liability Insurance be customized for specific business risks?
Yes, General Liability Insurance policies can often be tailored with endorsements to cover specific risks pertinent to different types of businesses.
4. Do small businesses need General Liability Insurance?
Yes, small businesses benefit significantly from having General Liability Insurance as it safeguards against potential financial loss from lawsuits and claims.
5. Does General Liability Insurance cover data breaches?
No, data breaches and cyber-attacks are typically covered under Cyber Liability Insurance, not General Liability Insurance.
Related Terms
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Professional Liability Insurance: Insurance that protects businesses against claims of negligence in the provision of professional services.
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Workers’ Compensation Insurance: A type of insurance that provides wage replacement and medical benefits to employees injured in the course of employment.
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Property Insurance: Insurance that covers damage to physical property of the business, including buildings and inventory.
Online References
Suggested Books for Further Studies
- “General Liability Insurance Handbook” by Nigel A. Evans - Comprehensive guide covering different aspects of general liability insurance.
- “Business Liability and Economics” by Gregory P. Niehaus and Lee R. Pomykalski - Discusses liability insurance principles in the context of business operations.
Fundamentals of General Liability Insurance: Insurance Basics Quiz
Thank you for exploring General Liability Insurance with us. Keep enhancing your understanding of business insurance needs and protecting your enterprise against potential risks!
