What is General Liability Insurance?
Put simply, General Liability insurance covers your company from physical injury claims (either bodily injury or property damage) brought by 3rd parties. This can include office mishaps (think “slip-and-fall” lawsuits) as well as injury resulting from your product malfunctioning or being misused in a foreseeable way.
Generally, GL will cover a wide range of physical damage by paying for the costs of litigation as well the costs incurred by the injury (think court-awarded damages, settlements, and medical costs). However, coverage through Founder Shield can be customized to include (or exclude) specific coverages depending on your company’s exposure to certain risks. For example, the policy can include coverage for personal injury resulting from a blog post (important for most tech companies) and exclude coverage for property damage from the use of fireworks (probably not quite as important). The scope of coverage can be catered to both your company’s needs and budget.
GL coverage extends to your products and completed operations as well, meaning that both your current and discontinued products are covered for any physical injury they may cause.
Why do I need it?
Does your company have laptops, other hardware, etc.? Does your company have a blog or utilize other social media outlets? Do you have a physical office at which your clients visit? Do you visit your clients at their offices? Does your product or service require you to have control over any of your clients’ property, such as their servers?
All of these situations (any many more too numerous to list) expose your company to 3rd parties or their personal property and therefore open you up to the risk that a third party will sue if you don’t handle things properly. As you can see, GL exposure is massive for almost any company! If you can think of any situation where your company or any of its employees is directly or indirectly responsible for the safety of others or another’s property, you’re exposed!
Even if you think you have all of those situations covered, GL still protects your company from unknown risks, including property loss due to criminal activity.
It’s important to know that GL will also cover injuries caused by manufacturing defects in your product. You may be thinking, “well wait a second…I outsource my manufacturing to China so I’m never going to be liable for anything manufacturing-related anyway.” Unfortunately, that’s not how it works. In the eyes of the courts (and therefore the underwriters), anyone who touches the product at all can be liable for manufacturing defects, and often an injured party will name everyone in the “chain of distribution” as defendants in their lawsuit.
Finally, it should be noted that contracts often require your company to have GL coverage, whether it be your contracts with customers or your commercial lease agreement with your landlord.
How do I protect my company and myself?
Want to read more on the subject? Check out our blog posts on General Liability Insurance.
Read about other types of coverage