Do you know, an Insureon survey says 2.4% of small businesses faced a lawsuit for customer injury in 2016. These stats only emphasize that cases are commonplace and can happen to anyone. It could be property damage or customer injury, or anything else under the sky. It is tough to pay for all these suits. And that’s why people file general liability claims. Below are some common general liability claims!
But let’s first have a look at what General Liability Insurance is.
What Is General Liability Insurance?
As the name suggests, general liability insurance protects you from common liability claims such as bodily injury, etc., made by a third party (people outside of your business) against you.
It is commonly known as CGL (Commercial General Liability) policy. In simpler words, it covers legal costs when someone sues your business for bodily injuries, property damages, or advertising injury claims.
It pays for the legal costs like settlement fees, judgment fees, etc., if you get sued for the above-mentioned claims. And in exchange, you pay a small premium and mitigate your risk!
General Liability Insurance is helpful if you own a business that:
- Has an open space for people to visit (for example, a shop).
- You work closely with customers and clients who often visit your place like a home bakery
- You handle your client’s property like an interior designer.
- Your business operates on a rented property like a garage.
A List Of Common General Liability Claims
#1: Bodily Injuries
- Suppose you have a restaurant business. A customer comes in and slips and falls on the mopped floor. He can sue you for bodily injuries. Such slip and fall cases are possible in any business.
- In another example, a heavy object falls on your customer’s legs while shopping in your store. They can sue you for medical bills.
- Suppose a naughty child runs into your shop and suddenly falls and breaks his teeth. His parents can sue your business to pay compensation for his injury.
There are many examples where a simple customer injury results in a loss of thousands of dollars to a business. A CGL policy will pay for such customers’ medical expenses and cover the legal costs of the lawsuit should the third party file a lawsuit.
#2: Property Damage
If you or your employees damage your client’s property, this mistake can cost your business a hefty lawsuit. Some commom claims are,
- For example, one of your employees delivers some parcels in a truck to another company. He was negligent and crashed into this company’s building. You are liable for this accident and will have to pay for the losses and maybe legal costs should there be a lawsuit.
- In another example, let’s say you rented a property for your business. You moved furniture here and there but later noticed some marks on the costly wooden floor. The owner might sue you for property damages!
To prevent paying for such damages, invest in a CGL policy.
#3. Advertising Injuries
General Liability insurance covers advertising claims such as copyright infringement, slander, and libel.
- Suppose a business claims that the advertisement you published for them had inaccurate descriptions of their product. They can claim that their business lost clients because of your ad. Your General Liability insurance will even pay for such claims.
- In another example, suppose one of your employees posts a Twitter rant about your competitor’s product. The owner of the other company can sue you for slander.
#4: Product Liability
Customers can also sue a business if their products cause any injury to them. It does not matter if the injury happened in the store or outside it.
- For example, a coffee maker company gets sued if a customer claims that a fault in their machine led to a burnt hand or worse.
- In another example, suppose your company sells organic manure. A customer buys from you and gets massive allergies the next day. She can claim that your product caused her the allergy and sue you.
What Does General Liability Insurance Not Cover?
#1: Professional Errors
Professional errors are not covered under GLI policy. For example, if a company sues an investment banker for providing wrong financial advice, he is liable to pay for the company’s loss.
Professional liability insurance can protect you against such claims.
#2. Employee Injuries
General Liability insurance also does not cover the injuries suffered by your employees while working for you.
For example, if one of your courier men met with an accident while delivering your parcel, he can sue you for medical bills. Consider getting employee compensation insurance for such instances.
#3. Damage To Business Property
If certain natural calamities destroy your property (fire, storm, etc.), General liability insurance will not pay for it. It would be best if you had commercial property insurance for it.
For example, a fire incident occurs at your office. Whether intentional or unintentional, you may need to shell out dollars for it.
#4. Accidents Involving Vehicle Used By A Business
If your delivery boy, while delivering packages to your client, runs into a road accident, damaging your business vehicle, your GL policy will not pay for it!
You need to get commercial auto insurance to safeguard your company vehicles.
#5. Intentional Harm To Third Party
Any intentional harm done by a business to a third party is not covered under this insurance. Even intentional copyright infringement and willful negligence are not covered under a GL policy.
Conclusion
The law does not require you to carry General Liability insurance. However, it can save you from paying millions in lawsuits should you find a claim filed against you. Small businesses can go under the bus while paying such large amounts. And that is where, General liability insurance comes into the picture. It saves you from paying unnecessary out-of-pocket expenses for claims like bodily injuries, advertising injuries, property damage, etc. Moreover, it gives you peace of mind and the confidence to take on new challenges freely! You already have a lot on your mind; you don’t need more!
So, this was all about common General Liability claims. If you have any questions or suggestions, let me know in the comment section below. Does your business have General Liability insurance? Have you faced or heard anyone face any common claims discussed in this article? Share your experience in the comment section below. Let’s discuss! I am all ears!
