Understanding the Limits of General Liability Coverage

General liability insurance is a cornerstone of risk management for businesses. However, even the most robust policies may have limitations. At 1st Choice Insurance, our team knows that understanding your policy’s limits is just as important as having coverage in place.

What Does General Liability Insurance Cover?

General liability insurance is built to help cover your business against common risks, such as:

• Third-party bodily injury (e.g., a customer slips and falls on your premises)
• Other parties’ property damage caused by your business operations
• Personal and advertising injury, such as claims of libel or copyright infringement
• Legal defense costs related to covered claims

This coverage forms the foundation of many business insurance programs, offering liability coverage against unexpected events.

Why Are Coverage Limits Important?

Every general liability policy includes coverage limits, which are the maximum amounts your insurer will pay for a covered claim. These limits typically include:

• Per-occurrence limit, which is the most your policy will pay for a single claim.
• Aggregate limit, which is the total your policy will pay for all claims during the policy period.

If a claim exceeds your policy’s limits, your business may be responsible for the remaining costs. Selecting limits that reflect your business’s size, industry and risk exposure is important.

What About Policy Exclusions?

In addition to coverage limits, your general liability insurance may also be incapable of covering certain situations altogether. Consider the following common exclusions:

• Professional errors, such as providing incorrect advice or missing a deadline
• Employee injuries, which require workers’ compensation coverage
• Damage to your own business property
• Vehicle-related incidents, which can be covered by commercial auto insurance
• Intentional or criminal acts

How Our Team Can Help You Choose the Right Coverage

Our team at 1st Choice Insurance works closely with business owners to assess their financial risks and recommend appropriate general liability coverage. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.