Feb 3

How Does General Liability Insurance Work?

post Category: Business Insurance post postFebruary 3, 2008

Once an insurance company (insurer) has issued a general liability insurance policy for your business, the insurer has agreed to pay all costs for a covered liability claim against your company. This claim or lawsuit might be based on an action by your business and, in some cases, it might be based on an action you didn’t take.

How Much Will General Liability Pay?

Each general liability insurance policy has a stated maximum amount it will pay in a policy period, usually one year. The decision as to the maximum dollar amount of coverage is usually made by you and your business insurance agent.

How Much General Liability Do I Need?

There are certain factors which will affect the amount of coverage you should buy:

  • There are areas of the country where the courts have a reputation of awarding very large settlements in liability claims. This should be taken into account when you and your agent decide on the amount of general liability insurance coverage.
  • General contractors may require a certain dollar amount of general liability coverage before they will let your business work on their property.
  • Another factor would be the degree of liability associated with your type business. For example, a business which transports people would probably have a higher degree of liability exposure than a business which delivers packages.

 

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How Can I Buy General Liability Insurance?

General liability insurance can be purchased as a stand alone policy or it can be part of a packaged Business Owner’s Policy (BOP).


Other Insurance Maze Articles of Interest

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