Understanding General Liability – A Guide to General Liability
Today’s society is increasingly litigious, and even small missteps can result in large lawsuits. Therefore, general liability (and property and worker’s compensation insurance) is critical for companies. General Liability insurance can protect a company’s assets if it is sued for property damage or personal injury by a visitor or client to their premises.
You can purchase general liability on its own or as part of a business owner’s policy (BOP) or a package policy. BOPs and Package policies bundle liability and property insurance into a single policy.
So how do you decide how much coverage your business needs? It usually depends on a couple of factors:
Perceived risk. Consider the amount of risk associated with your business. A heavy machinery manufacturer will carry a much greater risk of being sued for personal injury than a linen manufacturer.
Your company’s location. Some states have a history of awarding high damage amounts to plaintiffs claiming personal injury. Businesses that operate in such states should carry liability insurance with higher coverage limits. You should consult with a licensed insurance broker to obtain more guidance in this area.