In the modern society, a small accident can result in protracted and potentially money- sapping lawsuits. General liability insurance, therefore, becomes essential for some companies. General liability insurance protects a company's assets when it is facing a lawsuit for damages it may or might not have inflicted upon an individual though injury or property damage.
General liability insurance can be purchased independently or within a BOP (Business Owners Policy). A SMALL BUSINESS Owners Policy packs liability and property insurance right into a single policy. The liability insurance plan limits, however, are usually quite low. Businesses needing a greater coverage usually buy liability insurance as an independent policy.
In a general liability insurance policy, legal costs of a small business in a covered liability lawsuit must be paid by the insurer. Covered liability claims include property damage, bodily injury, accidental injury and damages from false advertising, also called advertising injury. Insurance firms also cover general and compensatory damages. However, liability plans usually do not cover punitive damages, because they are deemed punishment for deliberate actions.
General liability plans always declare a maximum amount that insurers have to give during the policy period. Under the policy, gleam maximum amount that the insurer must pay per occurrence. For instance, if a company includes a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance provider is obligated to pay just the $1.5 million; the others needs to be paid by the business company.
As a cover against these kind of circumstances, companies buy umbrella liability insurance, which comes into the picture where general liability coverage stops. https://www.prioryinsurance.co.uk/ covers payments that exceed the business's policy's limits and provides extra protection for liabilities not covered in the standard insurance policy.
Generally, there exists a requirement for the policyholders to report to the insurance company the moment an accident that may result in a liability claim has taken place. The business owner will then need to help in the investigations, forward legal notices, etc.