General liability commercial insurance is an essential type of coverage for any business. Most business owners recognize this but do not fully understand exactly what this insurance covers. If you have one of these policies in place, it’s crucial to protect yourself by understanding both its reach and its limitations.
Typical Areas of Protection
Most general liability insurance policies provide financial coverage in the event of claims that involve property damage or personal injury. Your policy may address costs associated with investigating the incident and mounting a legal defense. If you reach a settlement or are ordered to pay damages, general liability insurance also can cover a set amount of those costs.
Excluded Costs and Situations
General liability commercial insurance excludes property damage and injuries that occur under certain circumstances. For example, auto accident claims aren’t covered, and neither are employee injuries. Additionally, coverage might not be available in the following situations:
- Your business or its representatives engage in knowing misconduct.
- Your business makes a professional mistake.
- Your business is ordered to pay punitive damages.
Fortunately, there are other types of insurance that can complement your liability coverage and address these risk areas.
Ensuring Full Protection
It’s important to understand the situations that are excluded from your liability policy so that you can put together adequate protection. Reviewing your current policy and your other options with an insurance agent is an advisable way to make sure that your business is not left exposed to any unexpected liability.