General Damages

What Does General Damages Mean?

General damages are financial compensation awarded for injuries or losses that do not have a specified dollar amount. In other words, general damages provide compensation for intangible factors such as pain and suffering or certain breaches of contract. In the context of insurance, liability insurance coverage can help prevent parties from bearing the full cost of paying general damages. Most business owners carry a general liability insurance policy for exactly this reason, since it pays out on bodily injury and property damage suits where non-economic losses are usually at stake.

Insuranceopedia Explains General Damages

General damages differ from special damages and punitive damages. Special damages have a specific dollar amount, while punitive damages are financial penalties intended to punish the wrongdoer. There are various types of liability insurance available for both individuals and companies to protect themselves from the risk of owing general damages. Two examples are product liability insurance and general liability insurance. Product liability insurance protects companies against injuries caused by faulty products, while general liability insurance covers injuries that occur on a property. Because pain and suffering awards can climb well past the limits on a standard policy, some companies also carry commercial umbrella insurance to cover the gap on larger judgments.