WHAT IS GENERAL LIABILITY INSURANCE?

 

General Liability insurance covers liability for bodily injury and property damage caused by an accident, except for liabilities specifically excluded.  Coverage applies at your premises, or anywhere else in the United States, its territories, or Canada.

 

Prior to the 1960’s the liability exposures of almost any organization could be covered completely by the combination of General Liability, Automobile Liability, and Workers Compensation.  Today other types of liability coverage are needed because changes in the law have created new liability exposures beyond the scope of General Liability. 

 

 

GENERAL LIABILITY CLAIM EXAMPLE

 

No one at the small nonprofit drug rehab in rural Arizona knew that their nearest neighbor, a ranch owner two miles away, had purchased a $200,000 race horse.  Even if they had known, they’d hardly have considered the horse a liability exposure.  The exposure became apparent when one of their resident patients ‘escaped’ from the center, stole the horse, and while galloping across a highway was hit by a car.  The horse was killed and the resident was severely injured.  This event led to two separate lawsuits against the center.  The first lawsuit was brought by the resident’s parents for bodily injury caused by alleged negligent supervision, and the second suit was brought by the rancher for the loss of his horse. 

 

Not surprisingly, none of the rehab’s liability policies provided specific coverage for injuries caused by riding a horse, or for horse mortality, but the rehab was covered for both lawsuits under its General Liability policy. With General Liability it’s not necessary to anticipate whether you have a liability exposure for stolen race horses; you need only anticipate whether you have exposures that are specifically excluded under your policy.

 

 

EXCLUSIONS UNDER THE STANDARD GENERAL LIABILITY POLICY

 

▪    EXPOSURES CONSIDERED UNINSURABLE

 

▪    expected or intended injury

▪    contractual liability

▪    liability due to war

▪    damage to products you manufacture or repair, caused by faulty workmanship

▪    damage to the particular part of any real property that you or your subcontractors have worked on, caused by faulty workmanship

 

 

▪    EXPOSURES THAT SHOULD BE COVERED UNDER ANOTHER LIABILITY POLICY

 

▪    auto, watercraft and aircraft liability

▪    injury to employees

▪    liquor liability

▪    pollution liability

▪    liability arising from the transporting or racing of mobile equipment

 

 

▪    EXPOSURES THAT SHOULD BE COVERED UNDER A PROPERTY POLICY

 

▪    damage to property owned by you

▪    damage to property in your care, custody or control

 

 

 

Underwriters add endorsements to all General Liability policies, either excluding or expanding coverage. The scope of coverage under any General Liability policy will depend upon the particular exclusions and enhancements added to the standard policy.

 

 

CLAIMS CATEGORIES

 

     TYPICAL GENERAL LIABILITY CLAIMS CATAGORIES

 

▪    injuries arising from your premises

 

▪    injuries to clients under your supervision

 

▪    injuries to volunteers while working for you

 

▪    injuries to guests at special events

 

▪    injury caused by products you sell or manufacture

 

▪    fire damage to your landlord’s building

 

▪    damage to property not owned by you or in your possession