Demystifying General Liability Insurance
Everyone is becoming more educated. This is a good thing as our society improves and becomes more civilized. Consequently, we all become more aware of our rights which lead to a more litigious population. On some occasions, small issues are blown out of proportion and become major lawsuits.
In this respect, it is essential for companies to have General Liability Insurance. General Liability Insurance along with Property and Worker's Compensation insurance are a must-have for every company. These insurances protect a company' s valuable assets if sued for property damage or personal injury on another party.
Preferred Bonding & Insurance Services offers General Liability Insurance as a stand-alone policy or as a part of a Business Owner's Policy (or BOP), which already include Liability and Property Insurance.
Still, business owners need to know that Liability Insurance can only cover up to a certain extent. When your business is in need of more liability coverage, you will need to separately purchase a different policy.
Now, how do you know how much coverage your company might need? This depends on two factors: Perceived Risk and Location.
Perceived Risk provides for assessment on the amount of risk that may be involved if your operations accidentally fall short of plans or puts an employee or another party in danger. To contrast, a clothing manufacturer will require lower liability insurance coverage compared to a company that is riskier to operate such as an oil drilling company, construction or other natures of business that require heavy machinery.
When it comes to Location, you need to take into account the state that your company is operating in. Several states in America award high damage amounts to parties who file for personal injury. It's best to consult with us or your legal department to be better guided in purchasing General Liability Coverage that suits the circumstances established in your state.
General Liability Insurance: How does it work?
General Liability insurance provides for coverage on the maximum amount that your insurer will shoulder when claims are applicable and while the policy is active. Say, a company is covered by the insurer for $500,000 in General Liability. If said company is sued for damages and is fined for $750,000, the insurer will pay the maximum amount of coverage while the company will be responsible for the $250,000 balance.
As added protection, companies purchase Umbrella Liability Insurance to cover for excess amounts or amounts that are above the maximum of General Liability coverage.
In all cases, it is best to document occurrences of accidents as insurance companies require policy holders to report claims as soon as possible. As investigations are conducted, your company's documentation will be of great use.
An up-to-date and complete set of documents, company-wide quality control measures, well-trained employees and strict work-place safety policies by the company are ways to also help keep your insurance rates down. By lowering potential risks, you keep your protection high.