There are four primary types of claims that general liability insurance protects you against: advertising, bodily injury, personal injury and property damage. While any policy can be customized to cover you and your business against additional liabilities, these four will generally be the basis for coverage in any standard business liability insurance plan you purchase.
Four Claims that General Liability Insurance Protects You Against
In this article, we’ll take an in-depth look at each of these types of claims and how to determine your company’s specific level of exposure to each of them. A review of each follows.
Advertising Injury
Courts have traditionally struggled to come to agreement on the exact definition of advertising injury as it relates to businesses, but most legal interpretations include damages caused by slander, libel, privacy violations, copyright infringement, and disparagement of goods, products or services. For the purposes of commercial general liability insurance, these damages are generally defined as having occurred in the course of the insured policy holder conducting some form of advertising activity.
Even if you do not run a business that conducts large-scale advertising campaigns, you may still become the target of an advertising injury claim. Some of the most-frequently filed advertising injury claims stem from activities such as making a disparaging remark about a competitor’s service or unauthorized use of a photo or reference to a competitor’s product in an advertisement.
If your business conducts any type of advertising that includes claims about its products or services in comparison to a competitor’s then you definitely need to look into acquiring advertising injury coverage as part of your general liability insurance policy.
Bodily Injury
As its name indicates, a bodily injury claim usually comes from accident that causes a third party (e.g. customer, vendor or other visitor to your business) some type of visible physical harm. In order for the incident to be covered by your business liability insurance, it must either occur at your place of business, or as a result of a negligent act committed by your or one of your employees in the course of conducting company business.
While the classic example of a bodily injury claim is a customer slipping and falling on a wet floor in your store, lesser known examples may include a client suffering injury while riding as a passenger in an employee’s car during business hours or one of your agents accidentally injuring a client’s employee while at their place of business.
Needless to say, bodily injury claims can stem from a number of surprising sources, and settling them can be extremely costly. Regardless of the type of business you operate, bodily injury coverage must be included in your insurance policy.
Personal Injury
Unlike bodily injury claims, personal injury claims come from alleged damages caused to a third party that do not necessarily result in visible, physical harm. The most common types of personal injury claims are for libel, slander, or anything else that inflicts emotional pain and suffering.
As one might guess, this type of claim is common and can be caused by a wide range of incidents. Disgruntled former employees, unhappy customers and any number of other victims represent the most likely plaintiffs and, even in cases where the charges hold no merit (i.e. frivolous lawsuits) the legal fees associated with defending against them can be quite high.
In short, much like bodily injury, personal injury insurance is an absolute necessity for every business regardless of their industry and level of interaction with the public.
Property Damage
The last of the four main types of claims covered by general liability insurance is property damage. Your commercial GLI covers damage caused to third parties and their property by negligence on the part of you or your agents.
Again, property damage claims are a relatively common occurrence for most types of businesses that have a high level of exposure to the public. Something as innocent as a fender bender between two customers in your parking lot can potentially result in a property damage claim against your business, so this is definitely another area where you are better off carrying coverage regardless of your business’ location, industry, etc.
Is There Anything Else That Liability Insurance Protects You Against?
As technology becomes a bigger part of every business’ day-to-day activities, new types of liabilities are being created. For this reason, many insurance providers now offer the option to include cyber liability insurance as part of your standard policy, as well as several other types of technology-based coverage (e.g. Electronic Data Liability). As always, when shopping around, make sure that you are aware of the specific exposures that a provider’s general liability insurance protects you against before purchasing a policy.