General Liability Insurance
A general liability insurance is an essential policy for any business that wishes to protect itself from potential compensation claims. This insurance is designed to cover the financial consequences of damages or harmful actions for which the company may be held responsible, caused to other parties during the course of its operations. This type of insurance is characterized by covering damages that occur while the work is being performed, also known as "here and now damages."
What is general liability insurance?
A general liability insurance comes into play when a business faces a claim for causing bodily injury or property damage to a third party. Liability claims may arise as a result of physical damage, financial loss, or other forms of personal or material damage linked to the company’s activities.
General liability insurance is essential for ensuring that a business can withstand the potentially harmful financial consequences of a liability claim. This type of business insurance not only protects the business from financial ruin but also provides reassurance and trust to the company's customers, partners, and employees.
It’s important to note that each business's needs may vary, and it’s always recommended to consult with an insurance advisor who can assess the specific risks of the business and recommend the most suitable coverage.
Product liability insurance
General liability insurance is often purchased together with product liability insurance. Product liability insurance protects businesses against compensation claims for damages caused by their products or services. If a product or service is defective and causes damage, either physical or material, the insurance can cover the costs of compensation, legal fees, and litigation. Product liability insurance is crucial for businesses that manufacture or sell goods or services, as it provides financial security and protection against potential compensation claims from customers or third parties. The insurance can be tailored to the company's specific needs and risks.
What does general liability insurance cover?
General liability insurance covers liability outside of contractual obligations. This means the insurance provides protection in the event of damages or harmful actions the company may be responsible for causing to other parties, even if there is no legally binding contractual relationship between them.
Example of using general liability insurance
The following example illustrates the importance of general liability insurance and its role in protecting businesses from unforeseen compensation claims:
A service technician from a plumbing company is sent to a private customer's address to install a washing machine. Unfortunately, an accident occurs where the washing machine falls off the trolley during installation and damages part of the customer’s tiled floor.
Since this damage occurred during the performance of the technician’s work, and the technician is legally liable for the damage, this situation is covered under the plumbing company’s general liability insurance.
Get independent insurance advice at Söderberg & Partners
It can be challenging to predict when and to what extent damage will occur. That’s why it’s important to have an experienced insurance broker by your side who takes into account the risks and scenarios within business insurance that you may not have considered.
At Söderberg & Partners, our insurance brokers have the qualifications and experience to advise your business – whether you have 2 employees or more than 1,000.
It’s important to us that you, as a company, feel confident that you are properly insured. This allows you to focus on what you do best – running your business.
Based on our professional knowledge, we are often used as a sparring partner, especially when it comes to expanding business areas and evaluating the potential impact on your company. If we notice patterns in damages and types of claims, we assist you with strategies to prevent current or future damages, ensuring that your business is as well-protected as possible. We handle the administrative tasks and equip you to make the right decisions regarding risk management and insurance coverage.
We Often Get These Questions
General liability insurance covers compensation claims against the business if, for example, an employee causes damage to people or property while performing work for the company.
A general liability insurance covers if the company's employees cause damage to people or property, and the business faces a compensation claim.
It is not mandatory for businesses to take out general liability insurance, but it can be a good investment, as the business may otherwise end up having to pay for a potential compensation claim itself.
No. A general liability insurance is often purchased together with a product liability insurance. Product liability insurance is a policy that protects the business from compensation claims for damages caused by the company's products or services after they have been put into circulation.