In liability insurance, what is commonly covered under "general liability"?

General liability insurance is designed to protect businesses against claims from third parties for bodily injury and property damage. This coverage is vital because it addresses situations where a business’s actions, products, or services could accidentally harm a person or damage someone else's property.

The primary purpose of general liability insurance is to cover the legal costs arising from such claims. If a customer trips on a wet floor in a store and is injured, or if a business accidentally damages a client's property while delivering services, the business can be held responsible. General liability insurance assists in covering medical costs, legal fees, and any potential settlements or awards resulting from these types of claims.

This type of insurance does not extend to bodily injury or property damage claims involving the business's own employees (which would be covered under workers' compensation), nor does it cover contractual disputes. Instead, it focuses on third-party interactions, ensuring that any unforeseen accidents or mishaps do not financially cripple the business. Therefore, the coverage provided under general liability is essential for effective risk management in commercial operations.