Understanding General Liability Coverage: The Basics And Benefits

You may have heard about general liability insurance or liability umbrella policies, but you might not be sure what those policies are or what they can actually do for you. Understanding the fundamentals of liability insurance is a good place to start to help you ensure adequate insurance protections against the risks that you face.

Here's a look at a few things that you should understand about liability insurance policies. 

What Liability Insurance Can Do For You

Liability insurance offers a wide range of protections, including personal injury liability in case someone is hurt on your property or by a product you've sold. In addition, it covers liabilities such as slander, libel, and even advertising liabilities. Since these types of claims can prove costly, liability coverage is beneficial for protecting your assets from attachment as a result of an incident.

Why You Might Need General Liability Coverage

As a policyholder with property insurance, those policies typically include liability protection up to a certain coverage limit. In most cases, those coverage limits are fairly low compared to significant liability risks.

General liability insurance offers you larger liability limits to protect against more significant losses. This is important if you have a high-risk property, including one with playground equipment, a swimming pool, or even dogs. Not only that but, if you work in a high-risk industry, having general liability insurance is important for your financial protection as well.

General liability coverage only kicks in when the liability limits on your existing policies are exhausted. If you have a claim that exceeds what your homeowners' policy will cover, for example, your general liability policy will pay for the excess. That is why general liability coverage is so beneficial.

How To Decide How Much Liability Coverage You Need

There are a number of factors that affect how much liability coverage you need. First, consider your level of liability risk. That helps you determine if you are at greater risk of liability issues and therefore need more coverage. For example, high-risk lifestyles, high-value assets, and visible or well-known people should have more coverage.

Think about your budget as well. Most liability umbrella policies are available in increments of millions, so set your budget and choose the coverage limit that you can afford after you determine your risk levels and the minimum amount of coverage you should carry.

These are some of the most important things to know when it comes to general liability insurance. Talk with a carrier near you today for more information.