What General Liability Covers — And What It Doesn’t
One of the most basic coverages a business can have is General Liability insurance, but what does this policy cover?
You know that the permit you have to pull or the contract you sign requires you to get General Liability. In the event of a slip and fall, however, you’re going to be glad you have it. Here’s a bit of what this policy insures for, and what it doesn’t.
Keep in mind that the GL policy we’re assessing is one that’s “occurrence-based.” That means that if an incident took place during a policy period, it could potentially be covered regardless of whether or not a policy is in force when the claim is made.
General Liability: The Basics
A typical Commercial General Liability policy includes the following coverage elements:
-Bodily injury liability.
-Property damage liability.
-Personal and advertising injury.
Bodily injury is one of the most common General Liability coverages. If, for example, a patron slips and falls entering your convenience store, or someone falls in a parking lot you were responsible for clearing after a snowstorm, that’s a bodily injury claim all the way. Please note that this doesn’t cover you or your employees if they are hurt at work; that’s Workers’ Compensation. This is for those bodily injuries occurring to third parties, like customers.
Property damage is coverage for damage caused to others. For example, if one of your employees accidentally damages a client’s wall during a job, that could potentially be subject to property damage liability. If the employee was injured, that, of course, would be Workers’ Compensation.
Personal and advertising injury takes into account claims that involve slander, libel, malicious prosecution, and false arrest, amongst other items. As we will go into with exclusions, a General Liability policy will not cover such instances if done illegally or with intent to harm.
Medical payments coverage, as the name suggests, is insurance for third-party medical expenses incurred because of an accident. For example, if a customer who slipped and fell in a parking lot needed an ambulance and first aid, this could potentially fall under this coverage. This is a no-fault coverage, though most Commercial General Liability policies only provide from $5,000 to $15,000 per incident.
General Liability: Exclusions
No insurance policy covers everything and anything. These are a few big standard exclusions under each of the aforementioned coverages. Please note that this is NOT an exhaustive list; you may refer to your policy or contact your insurance agent for more details.
Bodily Injury/Property Damage: Intentional injury, liquor liability (unless added or insured elsewhere), contractual liability (liability assumed under a written contract, except as defined in the policy), Workers’ Compensation, war, and pollution liability.
Personal and Advertising Injury: Criminality, breach of contract, contractual liability, copyright infringement, war, or injury on a message board (seriously).
Medical payments: Injury to an insured, injury involving athletics or exercise, or anyone covered by Workers’ Compensation.