General Liability

Even if you have workman’s compensation insurance to cover your employees for illness and injury, you’re not protected if your clients are harmed or their property is damaged. For this protection, you’ll need General Liability Insurance.

General Liability Insurance is for business owners who need protection from third-party claims of injury or damage to another person’s property or reputation. It’s also sometimes referred to as Commercial General Liability Insurance to distinguish it as business-related coverage.

What does it cover?

As you review this list, keep in mind that coverage extends only to accidents or unintentional oversights. If you or your employees have the intent to cause harm, coverage doesn’t apply. Coverage also excludes your own property as well as any vehicles, including boats, which would be covered under an auto or watercraft policy.

Another item not on this coverage list is protection for claims against your professional services. Those claims would fall under a Professional Liability Policy.

• Bodily Injury: Even though your employees are covered from injury with workman’s comp insurance, you’ll need separate protection for clients visiting your business locations. In addition, if you visit a client’s site and are found liable for any bodily harm that happens to them, then this insurance can cover any resulting claims.
  Bodily injury is a fairly all-encompassing term. It can include a client tripping over a misplaced chair, a plumber dropping a wrench at his client’s home, or a personal trainer loading too much weight on a client’s bar during a workout.
• Damage to Third-Party Property: If you or your employees cause damage to a client or third-party property, you can also be held liable.
  Here are a couple of examples:
  – You own a window washing company, and one of your employees break a window. The client can ask to be compensated for its replacement, and in this case, General Liability Insurance would pay for it.
  – You’re a hair stylist, and as you’re mixing the color for a client’s hair, you accidentally drop the bowl of dye into her expensive Birkin bag. Your client can file a claim for the replacement cost of the purse, which your insurance would cover.
• Personal Injury: Personal injury is different from bodily injury in that it has to do with reputation and goodwill instead of physical harm. These claims stem from accusations of libel and slander. Libel is a false, written statement that can be damaging to someone, and slander is a verbal statement.
  An example of this type of injury would be if you have an accounting firm and one of your staff accountants is overheard saying that the client is committing fraudulent activity. The client can sue your company for this false claim.
  Virtually everyone is connected to social media these days and claims of libel are increasingly prevalent. For example, let’s say this accountant also posted something on his Twitter account saying that he thinks this company he’s doing taxes for is committing fraud. Again, the client can sue for personal injury damages, and General Liability Insurance would be able to protect your business.
• Advertising Injury:  It can be tough to come up with an original idea, and two independently derived ideas may still have similarities. The problem arises when Company A accuses Company B of stealing a logo, an advertising idea or tagline. As long as Company B acted unintentionally and didn’t know their ideas were similar or infringed on Company A’s territory, then Company B will be protected.
• Electronic Data Liability: In today’s digitally driven world, electronic assets are often more valuable than a company’s physical assets. To add to this risk is the fact that digital assets aren’t always easily replaceable.
  For example, if you are a business owner and your firm provides IT services, and one of your employees damages a client’s data files. If they can’t be recovered, you can be held liable for the loss of that data. Hopefully, your client would have backups, but in case they don’t, you’ll need insurance protection to cover the damages.
• Medical Expenses:If someone is injured (other than you or your employees) and the accident happens at your facility, or you or your employee is at fault for the injury, your company will have to pay for the medical expenses. Because medical costs, even for a minor mishap, can skyrocket, having protection is valuable protection for your cash flow and financial position.
• Defense Costs: Legal fees can easily cost thousands of dollars, if not more. If you’re sued for a claim related to general liability, this insurance will protect you. You’ll receive an appointed lawyer and have your defense costs covered.
  Today’s society can be litigious, and even a groundless claim can be a hassle that can bankrupt your business. However, General Liability Insurance provides valuable protection so that you can continue to do business as usual.
• Actions of Full-Time and Temporary Employees: As a business owner, you can’t do everything and be everywhere at once, so it’s inevitable that as you grow, you’ll hire employees. Unfortunately, their actions are often out of your control, and even the best, most highly-trained employee can make a mistake.
  Here are some examples where General Liability Insurance would save the day:
  – A real estate agent preparing for an open house accidentally puts something in the garbage disposal that breaks it.
  – A graphic design employee is visiting a client site and drops one of the client company’s laptops.
  – You send a temporary employee to a client’s office to help with some administrative tasks, and she accidentally deletes your client’s customer database.
• Supplemental Payments: There can be unexpected fees on top of a claim that business owners may not expect. These can include interest on damages, legal defense costs, loss of your wages as the complaint is being investigated, etc.
• Worldwide Coverage: If you or your employees are traveling on business, you’ll have peace of mind knowing that any damage caused that you’re liable for will be covered, no matter where in the world you happen to be.

Does my company need it?

The short answer is that it depends. Not every company has operations that make it vulnerable to the claims listed above. There are some guidelines to help you decide. If you or your employees engage in the following activities, then General Liability Insurance will provide valuable protection:

• Face-to-face client interactions – Do you visit a client’s office or worksite? Do they come to you? If either of these happens as part of your business, General Liability Insurance can provide protection.
• Access to client equipment – If part of your company’s duties includes working with customer equipment or machinery, this type of Business Insurance can cover you if the client files a claim.
• Client representation – If you act on behalf of your client or represent their business in any way, you could be liable for damages caused during this period.
• Use third-party locations for business – Even if you’re not in your own office or a client’s space, you could still be liable for damages in other locations where business is being conducted.

You’re an HOA – Most Homeowners Associations have HOA coverage in the form of General Liability Insurance. It will cover the legal expenses for the association and address any damages that they’re liable for. This includes injuries that occur on the common property. This insurance is vital; otherwise, the homeowners themselves would be responsible for damages as part owners of the property.

Contractual obligations – Some contracts may require that you carry General Liability Insurance before proceeding.

Claim examples – How coverage works

Accidents happen, and there’s never a good time to have one. Plus, they’re impossible to plan for. Here are some common claim examples and an illustration of how coverage works in these instances:

• You are an acupuncturist, and a client has an appointment on a rainy day. She slips in your entryway, breaking her arm. Due to the nature of her work, she has to take time off, in addition to having medical bills. Fortunately, general liability insurance would provide coverage for her medical expenses and lost wages.
• You own a nail salon, and a client is getting a manicure. She places her laptop on your workstation so that she can read work emails during her appointment. You accidentally knock her computer off the table, shattering the screen and irreversibly damaging the machine. The client can claim damages for the replacement cost of the laptop, which would be covered by your General Liability Insurance.
• You’re a professional painter, and you’re on a job at a client’s home. Unfortunately, the client trips over your ladder and sustains a broken hip. If you are found liable for the medical expenses, your General Liability Insurance will protect your business.
• You’re an electrician, and you’re in the process of installing a new electrical outlet. As you begin to drill, you hit an existing wire, causing a fire. There is damage to the customer’s home. Your insurance will cover the claim up to the limit of your policy.

Why Click2bind for your general liability insurance?

As an independent agency, we have access to multiple carriers. We do all the research and comparison shopping for you, helping you lock in the most competitive prices while getting a plan that best fits your needs. We take a data-driven approach to find the perfect policy so that you have the coverage you need without paying for the things you don’t.

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What’s the Difference Between General Liability and Professional Liability?
Do I Need a Business Owner’s Policy?