General Liability Insurance: Understanding Policy Coverage and Claims

General liability insurance is a critical component of risk management for businesses of all sizes and industries — especially those in the agriculture, construction, and manufacturing industries.

It provides protection against a wide range of liabilities that a business may face, including bodily injury, property damage, and personal and advertising injury claims.

In this blog post, we delve into the intricacies of general liability insurance, helping you understand its policy coverage, and how to navigate the claims process effectively.

What is General Liability Insurance?

General liability insurance is designed to protect your business from financial loss due to accidental incidents involving bodily injury and property damage resulting from your company’s services, products, or operations. It is essentially a safety net that covers legal fees, medical bills, and possible repairs.

Imagine you own a construction company, and one of your employees accidentally damages a client’s property while on the job site. If you don’t have liability insurance, your business will be responsible for the full cost of repairs and legal fees. In extreme cases, uncovered general liability can lead to bankruptcy.

However, if your company has general liability insurance in place, you can report the incident to your insurer, and from there they will gather information and step in to cover these expenses, saving your company money from unnecessary financial burdens. What's more, if the injury or property damage incident advances to a lawsuit, your insurance provider will appoint an attorney to represent your company in court, covering the legal expenses.

General liability claims are very common in every industry, especially in construction, manufacturing, and agricultural industries. When you run an operation for a long enough period of time, it’s not a matter of if bodily injury or property damage will occur, but when. For example, there are more than 400,000 personal injury cases each year in the U.S. Therefore, it’s always in the business owner's best interest to get one step ahead of any potential incidents and purchase a general liability policy.

Guidelines for Navigating Your General Liability Policy Claim

In the event of a liability-related incident, it’s important to follow the proper steps to protect your interests. Here is a simple summary of what you should do when an incident occurs:

1. Report the incident. Notify your insurance provider immediately. The sooner you report the incident, the sooner an investigation and lead can be initiated.
2. Investigate and analyze. Your insurance company will review the situation and determine the validity of the claim. Documents, witness statements, or other evidence may be requested.
3. Get legal defense if applicable. If the matter escalates to a lawsuit, your insurance company will hire an attorney to defend your business in court. Legal fees are usually covered by your policy.
4. Settle or seek judgment. If the claim is valid and results in financial liability, your insurance company will handle negotiations or payments on your behalf based on the terms of the policy.

General Liability Risk Reduction Strategies

While general liability insurance is an important safeguard, businesses can take the following steps to mitigate liability risks:

• Use safety measures. Use comprehensive safety measures to reduce the possibility of accidents or injuries occurring on your premises or while working. For example, comply with safety signage requirements.
• Obtain contractual agreements. Write clear and strong contracts outlining responsibilities and payments, and protect your interests in transactions.
• Adhere to regular training. Provide ongoing training to employees to ensure they are aware of safety practices and are always in compliance. Educate them on how to avoid workplace injuries.
• Perform regular risk assessment. Regularly assess and update your business’s risk management strategy to avoid potential liabilities.

Partner with LCK Insurance Agency for Your General Liability Insurance Needs

Even the most cloistered, remote, or office-based businesses are at some risk of general liability incidents, but construction, manufacturing, and agricultural businesses are at a significantly higher risk when it comes to property damage and personal injury.

If your business doesn’t currently hold a general liability insurance policy, we urge you to reach out to one of our friendly, knowledgeable insurance agents at LCK today to get started. We can provide all the relevant information you need before you make a decision, and help you along the way to make the process easy.

When an incident does eventually occur, you can rely on LCK to have your back. Contact one of our licensed insurance agents at Leap Carpenter Kemps Insurance Agency at 209-384-0727 today!