General Liability Insurance Coverage

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Things to Remember...
  • General liability insurance covers your business when someone becomes injured or dies using your product, services, while on your property or as the result of being struck by a company vehicle
  • General liability insurance will also protect your business should someone make a claim that your products or services aren’t what you claim they are
  • General liability is only for businesses
  • As a business, you have to specify that you want your company autos covered under this policy

General liability insurance covers your business against losses when someone becomes injured or dies using your product, services, while on your property or as the result of being struck by a company vehicle.

General liability insurance will also protect your business should someone make a claim that your products or services aren’t what you claim they are.

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There are several different types of liability insurance; however, general liability is sold to businesses rather than to individuals while other types of liability are available to anyone.

What is the difference between general liability and auto liability insurance?

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One of the biggest differences is that general liability is only for businesses. In addition, a business doesn’t have to purchase auto liability insurance, if they choose to have auto coverage under their general liability policy.

Auto liability is available to both individuals and to businesses.

This type of coverage protects the driver of a vehicle against personal financial losses should they be the cause of a car accident.

Your auto liability insurance and general liability insurance will act as the payment to the injured party instead of them taking you to court to pursue damages.

However, your liability coverage is only as high as the limit that you choose. If the injured party wants more than what your policy can cover, then they may still come after you personally for damages.

Is general liability insurance an automatic cover in my business insurance?

No. As a business, you have to specify that you want your company autos covered under this policy; otherwise, this coverage will not apply.

Because you will have to purchase a specific type of auto insurance for your company vehicles and/or fleet insurance, you may not want to pay to have general liability cover your vehicles.

As a regular driver, auto liability insurance is a state auto insurance law in 49 states; New Hampshire is the exception.

However, most states have a low minimum of liability insurance coverage requirement, meaning that it doesn’t take long to cap out on the max your insurance company will pay if you choose this option.

You do have the option of increasing your auto liability coverage; however, the choice is entirely yours. The exception here is if you have borrowed money from a bank to pay for your car.

In many cases, the bank will set their own minimum insurance requirement to ensure that your insurance can pay for damages that are incurred in more serious accidents.

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Does general liability or auto liability insurance cover my personal property?

It is important to understand that liability insurance doesn’t cover the property of the insured! Liability insurance is designed to provide coverage for someone else’s losses, not your own.

The purpose of liability insurance is to ensure that you aren’t driven to bankruptcy, or your business doesn’t have to go under, if something happens that requires someone to be paid for losses.

If you want your personal property protected, then you need to purchase different insurance products.

As a business, you will want to consider purchasing business owner coverage and property insurance in addition to their general liability insurance.

Business owner coverage is insurance that covers your property in case of fire, flood and other acts of vandalism or nature.

Property insurance covers theft of business property. Most insurance companies recommend both types of coverage for a business.

Car drivers will want to consider comprehensive insurance and collision insurance:

  • Comprehensive insurance covers things like fire, flood, vandalism, theft and so on. This insurance isn’t recommended for vehicles with low monetary value.
  • Collision insurance covers the cost of damages to your vehicle caused by any collision, such as striking a deer, hitting another car, a lamppost, a pothole and so on. Much like comprehensive insurance, it is recommended that you don’t purchase this type of coverage if you have a car without any real value.

The coverage for autos doesn’t cover what you owe on your vehicle, only up to how much your vehicle is valued at by an insurance adjustor. If you need coverage to help with your loan, you should consider GAP insurance as well.

Who does my general liability insurance cover?

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Your general liability insurance should cover anything that occurs on your property or by your property. This includes problems that may have been caused by the action of your employees.

You do want to ensure that you read your entire policy before assuming you have the coverage you think you do.

It wouldn’t do to be caught in the middle of something only to find that you don’t have the necessary coverage to take care of it!

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