When you own your own business, you hope for easy relationships with employees, clients and everyone with whom you come into contact. If those relationships turn contentious for some reason, however, you will be glad your business insurance coverage package contains a general liability policy. A GL policy covers you when your business is sued by a third party. This coverage may not always be able to guarantee that you avoid a lawsuit, but it can help you handle the costs of getting the problem resolved.
General Liability Overview
A third party is any person or persons who do not work directly for your company. This can be an outside vendor, a client or simply a guest. Someone may sue you for any of the following issues:
- Bodily injury and accidents
- Property damage
- Advertising claims
- Libel or slander
- Copyright infringement
Your business insurance coverage pays for legal fees. This includes what your attorney charges to handle the case, as well as court costs if the lawsuit goes forward. In the event the plaintiff bringing the charges against you is awarded damages, your commercial liability insurance covers those expenses as well.
Lawsuit Prevention
When a company issued, the case may never make it to court. This happens when it is in both parties’ best interest to settle for an agreed-upon sum outside of court. A settlement is often less than what your small business insurance company could end up paying if the case went to court and a judge ruled in favor of your opponent, so the company tasked with paying damages is highly motivated to have its lawyers settle out of court. A settlement offer also helps the injured party by ensuring a faster decision on the amount of money awarded and guaranteeing that he or she is compensated in some way.
Having business insurance coverage means you have an agent in your corner who is motivated to advocate for you. When the insurance company’s attorney is able to settle out of court, it not only saves the company money but also saves you the time it would take to go to court and endure the lengthy process of a hearing.
Lawsuit Coverage
Sometimes attorneys can’t reach an agreement on a settlement, so a day in court becomes inevitable. In this scenario, your business insurance coverage helps you with any fees that you must pay the courtroom. If the judge decides in favor of the party bringing the suit, you may also have to pay their legal fees as well as the amount in damages awarded to them. Your policy should cover these costs as well. For example, if a customer sustains an injury from a fall that happened on your property, he or she may be given compensation for medical bills or other costs resulting from the injury. The general liability policy pays it on your behalf so that one accident does not set you back financially.
Business insurance coverage is a necessary expense that could end up paying for itself ten times over. While you can hope that you never need to file a claim on this policy, you will be happy you have it if you ever do need it.
