General liability insurance provides financial protection to a business. It offers financial protection against claims made against the business. This includes instances in which your case goes to court. It may help pay for out-of-court settlements as well. What does this mean for your business?
How Does General Liability Insurance Work?
General liability insurance creates a layer of protection against claims made by others. This includes customers, clients, and other people entering the property. If your employee makes a mistake, for example, this type of insurance may help cover the costs. If someone falls on a wet floor, this coverage may help. It may help with the following.
- Payment of Initial Claims
A person suffers an injury. Your company is to blame. This policy may help pay for the medical bills and other losses the individual suffered. In its simplest form, the insurance company collects information about the person’s losses. It never admits guilt. However, the insurer pays for those losses. The case ends.
- Payment for Court-Related Needs
Sometimes, an initial claim is not enough. The individual filing the claim feels they deserve more. And, they may. They decide to take the case to court. In this situation, the liability insurance may pay for your company’s legal defense. It will work on your company’s behalf throughout the court case.
- Payment for Out-of-Court Settlements
If a claim progresses to court, the legal defense team and claimant may come to an agreement before trial. They may agree to terms for the incident, above what the initial claim was. Again, it is unlikely the company has to admit any level of guilt. However, the insurance policy will pay for these out-of-court settlements.
Likewise, if the case goes to trial, and a jury or judge awards payment, the policy may help cover these costs as well. Keep in mind, there are limits. Every general liability insurance policy has a maximum payout. Beyond this amount, your company may be financially responsible. For this reason, business owners need to be sure they are obtaining the right amount of coverage for their needs.
Speak to your business insurance agent about this at 800-511-2892. Be sure your agent helps you determine the right level of protection for your needs. This can help cover many of the losses you experience in such claims. General liability insurance is one of the most valuable of all investments you can make.
Also Read: General Liability Insurance: 3 Myths Not to Believe