Understanding General Liability Insurance: A Comprehensive Overview

Your general liability insurance policy protects you against lawsuits and claims of negligence against your person, your company or your property. General liability insurance is a broad term for basic insurance coverage, but liability insurance can become very detailed depending on your industry. Insurance can be a huge cost for businesses and individuals each year, but from the insurance company's perspective these costs are justified due to the liability they accept on your behalf.

What Does General Liability Cover

General liability covers any accusations of negligence against you or your property. If you are accused of an intentional crime, your general liability coverage will typically not extend to this area. Negligence is generally defined as something a reasonable person could have foreseen. For example, if your sidewalk is significantly cracked, you could be sued for negligence and your general liability policy may cover the expense. For businesses, general liability can cover costs i a part of your building falls on another. Typically, accusations of wrongful termination or sexual harassment require a separate coverage. Depending on what you elect, your liability insurance covers different items. 

Which Insurance Companies Provide General Liability

All insurance companies offer liability insurance. However, not all liability insurance carriers specialize in the same area. For example, if you deal with a lot of contracts in your business, you may need a carrier that specializes in errors and omissions liability to protect you from any improper contracts. You can seek an insurance broker to assist you in determining which carrier will offer you the best options for your business. These brokers act as middle men with specialized knowledge in the insurance industry. 

What Factors Determine Costs

Your costs will be related to your premium - the monthly fee you pay to the insurance company. Your premium will depend on a number of factors. First, how much you choose to pay before you ask your insurance company to contribute is called your deductible. Higher deductibles can lead to lower premiums. Your limits will also affect your premium. Limits determine how much total your insurance company will provide in a given year. Lower limits typically mean lower premiums. Your history will also have an affect on your premium. If you have a lot of claims, your premiums will tend to go up.

How do I Reduce Costs

You can elect different limits and deductibles to attempt to lower your costs. You can also implement best-practices to keep claims low in order to become more appealing to insurers. For employers, implementing loss control policies can lower your premiums. This may include more specific employment practices contracts or educating your employees on sexual harassment policies. For individuals, property maintaining your home is important to reducing your liability exposure. On car insurance policies, taking safe driving classes can lead to reductions in premium.