Businesses need business insurance. Alongside your property coverage, you can equally benefit from having liability insurance for the losses you cause third parties. Perhaps the most essential type of this coverage is general liability insurance, which is, in many cases, the baseline of coverage from which most other liability policies can grow. One of the benefits of a general liability policy is that it can cover not only the costs you cause others, but also your own legal liabilities. That's important when it comes to your business' success, and here's why.
How Does General Liability Insurance Work?
Your business might make mistakes, even unintentionally and without any malice attached. However, regardless of innocence, the harm your mistakes might cause others could cost them a lot of money. Because the accident might have been your fault, then you might have to compensate those affected. You can let a general liability insurance policy pay the affected party on your behalf.
General liability insurance typically covers two types of losses:
- Bodily injuries occurring to third parties, such as a customer who slips and falls in your business. This coverage might pay their medical bills and recovery costs.
- Property damage that you cause to others. For example, if you are supposed to repair someone's furniture, but wind up damaging it, then you might use this coverage to repay them for the loss.
Some coverage also applies to personal injuries, such as libel or slander, that you are supposed to have caused to others.
On one hand, the policy can pay you to help settle the damage costs of others. This means you won't have to pay out of pocket. But furthermore, the policy will usually extend financial assistance to your legal costs, should a lawsuit occur as a result of an accident.
The Benefits Of Legal Assistance
Most people think liability policies will only pay others, rather than the policyholder. However, the reality is that policies can often compensate policyholders for their own legal costs, which often are very high obligations that beckon in the event of liability claims.
Many liability accidents lead to lawsuits because they involve a mistake on the part of the company. The party harmed by the mistake might think the company owes them significant assistance, and many decide to sue for such compensation. Liability policies can often help you reach settlements with the affected party, but they can also help you cover the costs of lawyers and your defense costs.
Even if a lawsuit proves entirely frivolous, and gets dismissed, you still might incur significant debts to lawyers and the courts. Therefore, you should consider the legal assistance offered by your policy to be an essential benefit to your business' long-term survival.