Bodily Injury

It may be difficult to imagine how your business could cause another person serious harm or even death. But it’s good to know that if you are ever held responsible for someone else’s sickness, injury, or disease, your general liability insurance policy would pay for:

• Medical care costs
• Loss of services
• Court-awarded compensation for deaths that result from an injury Property Damage

Even if you’re careful and take precautions, it’s still possible that something your business does – or something it doesn’t do – could damage another person’s property. It’s also possible that your actions might prevent the property’s owner from being able to use it. In such cases, your business liability insurance coverage compensates for:

• Physical damage to the property, or
• Loss of use of the property

It is important to note that property damage liability coverage often does not cover damage caused to client property you are working on or have in your possession.

Products-Completed Operations

Commercial general liability insurance policies generally include liability protection for services or products completed by your company. So if something your company manufactures or a service your company provides causes an injury, your policy would pay for any resulting legal expenses, as well as damages up to your policy’s limit.

Contractual Liability

Your commercial liability insurance coverage would cover liability you might take on when you enter into various contracts, such as:

• Easement-of-license agreements
• Building leases
• Elevator maintenance agreements
• Agreements to indemnify a municipality, if required by ordinance

Liquor Liability

If you do not manufacture, distribute, sell, serve, or furnish alcoholic beverages as a business, your general liability insurance policy will cover you if are held liable for a liquor-related accident. If you distribute alcoholic beverages occasionally, such as at a company picnic or office holiday party, you’d also be covered – as long as you don’t charge money for the alcohol.

Fire, Explosion, or Lightning Damage

The property insurance portion of your general liability insurance covers damage you may cause to other people’s property as a result of fire, lightning, or explosion, whether you own your business property or rent it. This coverage even applies to other areas in your building that may be damaged as a result of negligence on your part. Let’s say a fire in your office on the building’s second floor causes damage to another company’s offices below. Your liability policy will pay for the damage to the downstairs office space.

Hired Auto and Non-owned Auto

Most businesses add an option to their general liability policy called “hired auto and non-owned auto” insurance. If you don’t have any vehicles in your company’s name, this option meets the requirements of any contract that requires you to have commercial auto coverage.

This coverage also allows you to save money on at least part of the insurance that rental car companies recommend whenever you pick up their cars. When you rent the car in your company’s name, this insurance applies to the liability part of the rental car contract. You’ll still need to purchase damage insurance from the car rental agency if you want to be fully protected, however, as this option doesn’t cover physical damage to the rented vehicle.

Additionally, if you or an employee is driving a personally owned vehicle on company business, and you have an auto accident, non-owned auto coverage protects you should the company be sued. However, the policy will not cover a suit against you or your employee personally – that would be covered by a personal auto policy.

Legal Defense Expenses

Even if your company is not found liable for a claim, the process of mounting a defense is expensive without insurance. A business liability insurance policy will generally pay for:

• The cost to defend or investigate a suit or claim against you, including court costs, witness fees, attorney’s fees, and police report costs
• If the insurance company asks you to assist in your defense against a claim, it will pay your reasonable expenses, such as the loss of your income for a day in court
• It will pay the judgments or settlements resulting from covered suits, including interest required on the judgment and the injured party’s medical expenses if your defense is unsuccessful
• When a court requires you to post a bond to ensure you can pay a potential judgment in a liability suit, this insurance will pay the premium for the bond.

Medical Payments

If a person should be injured, either directly by you or at your place of business, your commercial liability insurance coverage would pay for funeral and medical expenses incurred within a year of the accident. For example, if one of your clients slips and falls at your office and requires medical treatment, your policy would cover the cost of that treatment. Of course, policy limits apply.

Personal Injury

Personal injury is the part of the commercial general liability policy that protects you should someone claim that your business caused damage that isn’t physical. In the following examples, most liability policies would protect you against any lawsuits related to:

• Publishing, in writing or verbally, false information that libels or slanders an organization or person
• Publishing material that violates someone’s privacy rights
• Falsely detaining, arresting or imprisoning someone
• Maliciously prosecuting someone
• Evicting someone wrongfully

Advertising Injury

Should you ever be sued over something that happens while advertising your company’s products or services, your business liability insurance protection will cover the claim. Advertising injuries can arise from:

• Publishing, verbally or in writing, false information that libels or slanders a person or organization
• Publishing material that violates an individual’s privacy rights
• Copying another company’s style of doing business, or advertising concepts