General Liability Insurance | What it Covers
General liability insurance provides protection for businesses and their owners. This coverage is available for any business providing services or products. General liability will cover a business in the event that a client files a lawsuit against it based on a claim of negligence, error, or omission. The insurance company will pay defense costs and judgments made against the business in the event that negligence, error, or omission has been made.
A business should have liability coverage to protect against bodily injury or property damage sustained during the course of business operations. For example, general liability will protect a furniture crafting business in the event of property damage caused by a fire in the building where the business rents space. The fire damage may have been the result of equipment failure, in which case the business owner did not intentionally cause the fire, but damage was caused nonetheless. Coverage is never paid for intentional bodily harm or property damage.
General Liability Insurance | What it Does Not Cover
General liability insurance, like other insurance products, does not cover every situation. It is imperative to read what is covered in the policy. General liability insurance will not provide protection for business owners in the event of harassment, discrimination, or wrongful termination. Most businesses with employees will eventually face a situation where harassment or discrimination occurs in the workplace. As a business grows, business owners are not able to manage every interaction that an employee may have with co-workers or clients. In this case, Employment Practices Liability Insurance (EPLI) is essential to protect the liable party in the event that an employee initiates a lawsuit or files a claim with a government agency such as the U.S. Department of Labor.
Other professional businesses may also find that they need additional coverage because of the limitations of general liability insurance. To minimize insurance gaps, architects, accountants, dentists, and engineers should find professional liability policies that protect industry-specific claims alleging negligence, error, or omission.