Of course, no small business owners like to think that something their company does or doesn’t do could injure, even kill someone else. But it’s comforting to know that if you are ever held legally responsible for such an injury, sickness or disease, General Liability coverage will pay the affected person or organization for:
- The cost of care;
- The loss of services; and
- Restitution for any death that results from the injury.
Regardless of how careful you are, you may find yourself in a situation where something your business does or doesn’t do damages someone else’s property. Even if you don’t physically injure that property, you may do something that actually prevents its owner from continuing to use it. If so, you’ll rest easier knowing that General Liability coverage will compensate the property’s owner for either:
- The physical damage to the property; or
- The loss of use of that property.
General Liability typically includes liability protection for your company’s completed products or services. This means that, if an injury ever resulted from something your company made or some service your company provided, your policy would pay for the resulting damages and any legal expenses (up to your policy’s limit). And if you were sued because of these damages, your policy would cover related defense costs regardless of who was at fault — in addition to your policy’s limit.
General Liability coverage extends to any liability you may assume by entering into a variety of different types of contracts, including:
- A building lease;
- Any easement of license agreement;
- An agreement to indemnify a town or city if required by ordinance;
- An elevator maintenance agreement.
As long as you’re not in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages, the General Liability policy will protect you in case someone claims you are legally liable for a liquor-related accident. This means that, as long as you don’t charge for the alcohol, you would be covered if you occasionally distribute alcoholic beverages — such as at any annual company picnic or a holiday office party.
If one of your employees ever sues you for an injury you supposedly caused, your General Liability policy would not cover any damages. Rather, this type of protection would be provided by your Workers’ Compensation policy.
Fire, Lightning or Explosion Damage
Whether you rent or own your business property, you’ll find it reassuring that the insurance plan for small businesses includes coverage for damage to property of others resulting from fire, lightning or explosion damage caused by you. Better yet, this coverage applies to other parts of the building you occupy that may be damaged due to your negligence. For example, if you rent the second floor of a building, and through your negligence cause fire damage to the first floor, your liability policy will also cover the damage you’ve caused to your neighbor’s office space.
Hired Auto & Non-Owned Auto
Hired Auto & Non-Owned Auto coverage is typically added as an endorsement on a General Liability policy. When there are no vehicles titled in the company name this coverage will meet the contract requirement for Commercial Auto coverage.
Hired Auto coverage replaces or augments the liability coverage offered by auto rental agencies. However, the vehicle must be rented in your company’s name and this does not replace the physical damage coverage that applies to any damage you cause to the vehicle you are renting. You should still obtain physical damage coverage from the rental agency.
Non-Owned Auto coverage protects your company in the event that your company is sued as a result of an auto accident that you or one of your employees has in a personal vehicle while on company business. This coverage will not protect you or your employee personally, only your personal auto policy will do that.
Legal Defense Costs
Even if your company is not legally responsible for some claim someone makes against you, it can be quite expensive to defend yourself against such claims. Fortunately, your liability policy will typically pay for:
- Any defense costs incurred directly by the insurance company, including attorney’s fees, witness fees, and police reports;
- Any court costs or related costs you’re charged in connection with a legal suit;
- Reasonable expenses you incur at the insurance company’s request to assist in your defense (such as loss of earnings if you have to testify in court). Your liability policy will also pay the premium for any bond the court requires, making sure judgment will be paid if you are found legally liable for some injury or damage.
If someone is accidentally injured either by you or at your business site, General Liability coverage will pay for medical and funeral expenses incurred within one year of the accident (up to your policy’s liability insurance limit). For example, if a customer slipped and fell on your premises and had to undergo medical treatments.
Something your business either does — or fails to do — may not physically harm a person, but it may personally injure them. If so, you’d want to know that your liability coverage would protect you from any lawsuits arising from such an injury. Most General Liability policies provide coverage if you are accused of: · publishing (either verbally or in writing) inaccurate information that slanders or libels a person or organization; · publishing material that violates a person’s right of privacy; · falsely arresting, detaining or imprisoning someone; · maliciously prosecuting someone; · wrongfully evicting someone.
If you are ever sued because of something that happened during the course of advertising your company’s own goods, products or services, this policy will provide valuable liability protection. Such advertising injuries may result from: · publishing (either verbally or in writing) inaccurate information that slanders or libels a person or organization; · publishing material that violates a person’s right of privacy; · copying some other company’s advertising ideas or style of doing business; · infringing on another company’s copyright, title or slogan.