What is General Liability Insurance?
AKA Product and Public Liability Insurance
General liability insurance is a type of business insurance that provides protection against financial loss arising from claims of personal injury or property damage. It is a fundamental form of risk management to help safeguard businesses.
How does general liability insurance compare with product and public liability insurance?
What does general liability insurance cover?
-
Covers liabilities for injuries sustained by third parties on the business premises - public liability insurance
-
Covers liabilities related to products the business manufactures, sells, or distributes - products liability insurance
-
Covers property damage to third-party property caused by the business or its employees - public liability insurance
What are the different types of liability insurance?
Public liability insurance provides financial protection against claims arising from bodily injury or property damage of persons other than your employees in the course of your business activities.
Product liability insurance provides financial protection against claims arising from bodily injury or property damage as a result of a fault with a good you have provided.
Employers liability insurance, otherwise known as workers compensation insurance, is seperate to general liability insurance and provides protection against claims arising from injury or illness at work.
General liability insurance examples
Product liability insurance claim
The affected customers decide to file a lawsuit against the smartphone manufacturer, seeking compensation for medical expenses, property damage, and other losses. The claims allege that the defective smartphones are responsible for the damages and injuries. In this situation, the manufacturer's product liability insurance (otherwise known as general liability insurance) would come into play. Product liability cover is designed to provide indemnification to businesses from financial losses associated with claims arising from the manufacturing or selling of defective products.
Public liability insurance claim
The injured customer decides to bring a legal action against the bakery, seeking compensation for medical expenses, lost wages, and pain and suffering. The claim alleges that the bakery was negligent in maintaining a safe environment for customers, leading to the customer's injuries. In this situation, the bakery's public liability insurance (otherwise known as general liability insurance) would respond. Public liability cover is designed to cover claims arising from third-party injuries or property damage that occur on the premises of a business or as a result of its operations.
Do you need a commercial general liability insurance certificate?
Other small business liability insurance:
What is liability insurance?
About commercial combined insurance
About the author
Simon Taylor is a respected senior industry professional and a Chartered Insurance Broker with over 20 years’ of experience in the commercial insurance sector as an underwriter, broker and director.