Comprehensive general liability insurance refers to an overall insurance policy which a company buys. It covers damages which the insured becomes legally bound to pay to another party. In plain language, it covers "damages or injuries" to third parties which occur as a result of: fire, mishap, theft, vandalism or malicious mischief. Other factors that go into the computation of the premium are underwriting rules, the nature of the product being sold and the business experience of the insurer. Underwriters test the insurer's underwriting ability based on a number of things like financial records, credit history, ratio of risk to profit and number of similar complaints filed against the insurer in the past year.
A comprehensive general liability policy typically covers three major areas: property damage, bodily injury and legal underwriting. The former two are self-evident. Property damage is usually handled through general negligence principles while bodily injury is handled through breach of contract principles. Legal underwriting is a complex area which many times requires the help of an attorney. This is because legal malpractice is a very serious accusation and one not even guaranteed to stick.
The biggest area where a comprehensive general liability policy can be useful is when the insured has a unique interest in certain trade or activity. For example, in the insurance industry, boat manufacturers are required to carry boat insurance. This protects them from the event that their product causes harm or injury to another individual. However, boat makers have limited experience in dealing with ship accidents and legal responsibility for such incidents is usually a hazy issue. The boat manufacturer can obtain special coverage under his comprehensive general liability policy.
A comprehensive insurance policy is also useful in situations where the insured is sued for some sort of tort claim. For example, say that you work as a personal injury lawyer. One of your clients files a suit against you for negligence. As part of the initial settlement offer, the insurance company will require you to purchase liability coverage. If you fail to do so, you could be forced into paying out a significant amount of money. The comprehensive portion of your insurance policy can be used to pay the remainder of the suit if the settlement offer is unacceptable.
A comprehensive general liability policy is also a good option for business owners. Suppose, for instance, that you own a restaurant that gets sued for injuries that occurred on the premises. Although the restaurant is sued for a relatively minor injury, the insurance company will require you to purchase commercial general liability coverage. You may find it helpful to add a personal property damage rider to the policy as well. This rider covers your expenses for replacing and repairing personal property that was damaged as a result of an accident on the property.
Clearly, a comprehensive general liability policy is an excellent choice for anyone who wants to ensure that they are adequately covered in the event that they are found liable for injuries or damages caused on their property. No matter what type of professional liability insurance policy you choose, it is important that you understand your limits. Accidents can happen, but you don't want to find yourself financially vulnerable because you were unaware of your liability coverage limits.
A comprehensive general liability policy typically covers three major areas: property damage, bodily injury and legal underwriting. The former two are self-evident. Property damage is usually handled through general negligence principles while bodily injury is handled through breach of contract principles. Legal underwriting is a complex area which many times requires the help of an attorney. This is because legal malpractice is a very serious accusation and one not even guaranteed to stick.
The biggest area where a comprehensive general liability policy can be useful is when the insured has a unique interest in certain trade or activity. For example, in the insurance industry, boat manufacturers are required to carry boat insurance. This protects them from the event that their product causes harm or injury to another individual. However, boat makers have limited experience in dealing with ship accidents and legal responsibility for such incidents is usually a hazy issue. The boat manufacturer can obtain special coverage under his comprehensive general liability policy.
A comprehensive insurance policy is also useful in situations where the insured is sued for some sort of tort claim. For example, say that you work as a personal injury lawyer. One of your clients files a suit against you for negligence. As part of the initial settlement offer, the insurance company will require you to purchase liability coverage. If you fail to do so, you could be forced into paying out a significant amount of money. The comprehensive portion of your insurance policy can be used to pay the remainder of the suit if the settlement offer is unacceptable.
A comprehensive general liability policy is also a good option for business owners. Suppose, for instance, that you own a restaurant that gets sued for injuries that occurred on the premises. Although the restaurant is sued for a relatively minor injury, the insurance company will require you to purchase commercial general liability coverage. You may find it helpful to add a personal property damage rider to the policy as well. This rider covers your expenses for replacing and repairing personal property that was damaged as a result of an accident on the property.
Clearly, a comprehensive general liability policy is an excellent choice for anyone who wants to ensure that they are adequately covered in the event that they are found liable for injuries or damages caused on their property. No matter what type of professional liability insurance policy you choose, it is important that you understand your limits. Accidents can happen, but you don't want to find yourself financially vulnerable because you were unaware of your liability coverage limits.
