All businesses are exposed to third party complaints and lawsuits based on legal theories of negligence. Insurance for defense of lawsuits and settlement of third party claims for negligence can be covered under a general liability policy.
Injuries caused by a business, its agents or employees fall into three general categories:
- Premises and Operations Exposures - Bodily injury or property damage caused to third parties by the business' building occupancy or business methods.
- Product and Completed Operations Exposures - Bodily injury or property damage to third parties by the business's manufactured goods or finished work.
- Contractual Liability Exposures - Bodily injury or property damage to third parties that is assumed by the business when under written contract. For example, certain businesses, like contractors, assume substantial risk each time they take on a new job.
In addition to these exposures, a general liability policy may include three other coverages:
- Advertisers Personal Injury - Coverage for actions brought against the business by a third party who feels that the business's advertising activities resulted in libel or slander.
- Fire Legal Liability - Coverage for damage done to the business' landlord because of any cause of loss that makes the business legally liable to the landlord.
- Medical Payments - A small ($5,000-$25,000) fund available for minor injuries sustained by visitors to the business who may or may not bring a legal action for negligence.
