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General liability insurance policy requires the maximum amount that an insurance company will be responsible for protecting the business owner by means of monetary compensations to the claimant during the time period when the policy is active. This policy usually list the maximum amount an insurer of the insurance company will pay per occurrence of a certain type of accident or injury.
If a business with US$ 2 million occurrence cap in its general liability insurance policy is sued for US$ 2.5 million, then the insurer would pay only US$ 2 million, leaving the company responsible for the balance US$ 0.5 million. The insurance company would not be responsible for any amount above that maximum.
Before purchasing an insurance policy, there is a need to know about the policy and its working. Now let us see how general liability insurance policy works. When an accident occurs on your business premises, you need to immediately report it to your insurance company as soon as possible. If the injured person he or she claims for monetary compensation for injuries, an adjuster or the member from insurance company will investigate the amount of liability by interviewing the injured person or any other witnesses. The investigation also requires the photos of the accident scene.
If the adjuster is of the opinion that there is a liability against your business for the accident or injury that the injured party sustained, an appropriate settlement is negotiated with the injured person. This settlement proceeds are also taken out of your annual insurance policy limits.
To keep liability claims and business insurance premium rates down, the business owner must take precautions to prevent accidents on their business premises. Keep all your company documents upto dated. Provide hidden cameras in your business premises for evidence. Train your employees properly. Ask your insurance agent to provide safety tips. Follow these tips to lower the potential costs of a liability insurance claim.