Scope of General Liability Insurance

Posted on March 8, 2011 by

In today’s society, even small mistakes result in large law suits. A business can overcome this type of risks by buying a suitable general liability insurance. The general liability insurance protects the business from the law suits made by the third party because of bodily injury or the damage caused to their property because of the actions performed by the insured.

Here are the some situations where general liability cover comes in to use for the insured:

Bodily injury:
If the business is responsible for someone else’s injury, general liability insurance policy would pay for:

  • Medical care costs
  • Loss of services
  • Compensations ordered by the courts, for the accidents resulting in death

Property damage:
Although companies take all the precautions to control the accidents, some actions may lead to the damage of third party’s property, in such situations liability cover will pay for

  • Physical damage to the property, or
  • Loss of use of the property

Contractual liability:
Commercial liability insurance coverage would cover liability when the insured enters into various contracts, such as:

  • Easement-of-license agreements
  • Building leases
  • Elevator maintenance agreements
  • Agreements to indemnify a municipality, if required by ordinance.

Employee injuries:
If an employee is injured while doing the job, he may be sued for the injuries caused by the business, in that situation general liability insurance cover will pay the compensation.

The insurance company will cover the cost to defend or investigate a suit or claim against you, including court costs, witness fees, attorney’s fees and police report costs.

The insurance will provide the compensation for the income the company lost in a day for attending to the court.

The cover also protects the people like executive officers, stockholders and directors while they are acting in their official capacities and it protects employees from claims that result from actions they take in their capacity as employees.

Products-completed operations:
General liability insurance policies of commercial companies, generally include liability protection for services or products completed by the company. So if the products manufactured by the company causes an injury, the policy will pay for any resulting legal expenses, as well as damages.

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