A typical business owners insurance policy combines three different policy types. These are business interruption insurance, commercial property insurance, and general liability insurance.
Business Interruption Insurance
Also known as business income insurance. This insurance policy protects you by replacing the income you are estimated to lose when you temporarily shut down. It is, however, imperative that the reason for closing down is covered by the policy. Else, if the business closes down due to reasons not covered by the policy, the insurer won’t replace the lost income.
Commercial Property Insurance
This insurance policy protects your business’ physical location and your business equipment. It covers both owned and leased equipment.
General Liability Insurance
It protects your business from a series of claims against it. These include property damage claims, bodily injury claims, and advertising injury claims. If you are charged in court over any of these claims, your insurer is obligated to settle all your legal bills, including your legal defense as well as the court judgment or settlement, if there is any. However, the amount your insurer will pay will not exceed your coverage limit.
As you can see, the general liability insurance policy is simply one of the policy types under the business owner’s policy. You don’t need to purchase a general liability insurance policy if you already have a business owners policy.
What Does General Liability Insurance Entail?
As mentioned earlier, the general liability insurance protects your business from injuries or damages to third parties or customers, including bodily injury claims, advertising injury claims, and property damage claims.
Bodily Injury Claims
General liability insurance covers all bodily injuries caused by your business operations. It covers payment for the medical expenses of a customer that was injured on your business property. It also covers payment for your legal defense if a customer sues your business.
Advertising Injury Claims
The policy also confers protection against advertising injury, which includes causing harm to someone’s reputation. It also includes violating copyright regulations on a business ad or your company’s marketing materials. A good example of advertising injury is using an artwork to advertise your business without obtaining permission from the artist. Another example is making negative comments about another business in a media interview which ends up harming that business.
Property Damage Claim
Finally, it protects you from all claims of damages a customer’s property may incur due to your business. For instance, an employee damaging a customer’s electronic device or an outdoor sign falling on a customer’s vehicle.
General liability insurance is an important insurance every business should have. Apart from the fact that it reduces your liability for unintended damages, it is often required by financial lenders, licensing boards, landlords, and business clients.
However, you are better off purchasing a full business owner’s policy when compared with the more specific general liability insurance. The reason is simple: it confers more protection and at a cheaper rate. If you want to know more about the relationship between these two insurance policies and which one is best for your business, contact us at Lou Agetta Insurance today. We are always happy to help.