What does General Liability Insurance Cover?

General liability insurance or commercial general liability (CGL) insurance is what businesses use to protect themselves from bodily injury or property damage lawsuits. "General" because it covers a wide range of risks that may arise from day-to-day operations.

{getToc} $title={Table of Contents}

General Liability Insurance Covers Bodily Injury

Bodily injuries are covered when a third party sustains physical harm or injury due to the insured's business operations or activities. 

Let's say a customer was harmed in a slip and fall inside your retail store, your general liability insurance may cover their medical expenses and associated legal costs. The injury may occur on the insured's premises, or it could happen off-site caused by a product the insured sold. In both situations, CGL policy typically covers both. 

General liability Insures Property Damage

General Liability also covers property damage, if you accidentally damage someone else's property while handling business the insurance can help with the costs of fixing or replacing it.

CGL insurance paid out for the 2010 Deepwater Horizon BP oil spill. BP's oil rig exploded in the Gulf of Mexico and subsequent oil saturated the gulf for days. The accident was so large it was the top story at every media outlet. The spill caused extensive damage to the surrounding marine environment, coastal areas, and private property.

Fortunately, BP had general liability insurance covering damages derived from the spill. The insurance helped cover the costs of cleaning up the oil spill, restoring the affected areas, and compensating individuals and businesses for their property damage.

The exact dollar amounts were undisclosed to the public, but the property damage coverage from BP's general liability insurance policy was clutch in mitigating the financial impact of the disaster.  It helped protect BP from spending millions of dollars and allowed them to fulfill their obligations to those affected by the oil spill.

Personal and Advertising Injury Covered

Personal and Advertising Injury is standard general liability coverage it refers to non-physical injuries: 
  • Defamation
  • Slander
  • Copyright Infringement
  • Invasion of Privacy
  • Wrongful Eviction
  • false advertising claims in special circumstances 
Caution advised! Defamation lawsuits and insurance policies have unique circumstances and clauses. 
Amber Heard thought she was entitled to an insurance payout to help cover the $10.4 million a jury ordered her to pay Johnny Depp, “An insurer is not liable for the loss caused by the willful act of the insured,” her insurance company wrote (A jury determined that Heard “willfully” defamed Depp).

General Liability Cover Legal Defense Costs

Yes, general liability insurance can help cover the costs of legal defense including attorney fees, court costs, settlements, or judgments if you are sued for a covered claim.

CGL policies typically have limits and deductibles that define the maximum amount the insurance company will pay and the portion you are responsible for before coverage kicks in. Coverage may be subject to certain exclusions or conditions outlined in the policy so it's imperative to review your policy terms to understand the extent of coverage and any limitations.

Post a Comment

Previous Post Next Post

Contact Form