General Liability Insurance

What Does General Liability Insurance Mean?

A general liability insurance policy is type of insurance policy that protects insured commercial entities from a variety of liability risks, except for automobile and professional liability. It pays for various expenses, such as:

• Medical costs incurred if someone sustains an injury on company property
• Property damages or injuries that the owners or employees of the company cause
• Legal expenses, including the cost of the company’s legal defense, settlements, and awards if someone sues the company
• Damages, such as non-monetary losses suffered by the injured party, compensatory damage, and punitive damages
• Tenant-related liabilities, such as property damage if the company use rented property
• Expenses arising from claims pertaining to misleading or false advertisement, including slander, libel, and copyright infringement

General liability insurance is also known as commercial general liability insurance.

Insuranceopedia Explains General Liability Insurance

Liability insurance protects the policyholder from the risks of liabilities arising from lawsuits and other similar claims. Typically, insurance companies have designed liability insurance policies to provide protection against third party insurance claims. Thus, they do not pay the claim benefits to the policyholder but to a third party injured by the policyholder.

It is worth noting that the insurance contract does not mention this third party. When the injured third party files a claim, the insurance company has the authority to defend the policyholder.

Many insurers often cover public and product liability risks under a general liability policy. These risks could typically include bodily injury or property damage caused by the direct or indirect actions of the policyholder. These policies specify the maximum amount payable by the insurer against a liability claim.