Even if you take steps to ensure your business maintains smooth operations, accidents can still happen. If your business’s actions cause harm to others, the affected individuals may take costly legal action. In these cases, it’s important for your business to have proper insurance protection in place. That’s where general liability coverage can help. Keep reading to learn more about this type of policy and how it can assist with the legal expenses that often accompany liability lawsuits.
Understanding General Liability Insurance 
Your liabilities are the chances you have of causing harm to third parties. There is always a chance that you might negligently harm someone who interacts with your business (e.g., a customer). You will use general liability coverage under these circumstances to compensate those who sustained the loss. In other words, this form of insurance can offer protection against the resulting expenses if your business is held responsible for injuring a third party or damaging their property.
General liability coverage usually includes following forms of coverage:
- Bodily injury liability coverage—This coverage can compensate expenses stemming from injuries that a third party may face on your business’s property. Namely, it can cover medical costs related to such injuries.
- Property damage liability coverage—This coverage can reimburse costs related property damage that a third party may experience due to your business’s actions.
General liability insurance can also help protect your business against lawsuit costs related to third-party bodily injuries or property damage—such as defense costs, court fees and settlement expenses.
Why Policies Offer Legal Expense Coverage
Legal assistance coverage is common within most liability policies. It can cover the insured business if a victim sues the business for damages. The policy can cover the insured’s own legal expenses incurred by responding to the claim. It can also cover the legal expenses of the party that sues the business, if necessary.
Liability policies offer legal assistance because of the significant cost burden that might fall on a business if a lawsuit arises. Court costs, lawyer fees, judgements and settlements can add up quickly. Since this cost burden often falls on the at-fault party, then the business might have to pay. Unless you have the financial reserves to cover these costs on your own, you might struggle. This hardship could destabilize the business both in the short- and long-term.
Though legal assistance is a perk of liability coverage, it is not all-encompassing. For example, policies will not cover punitive damages awarded by a court. Courts use punitive damages to make an example of, or punish, a criminal offender. Policies will never pay for claims that result from criminal or intentional acts. Therefore, by definition, they cannot cover punitive damages.
To understand more about the benefits of your liability policy’s legal assistance, contact your business insurance agent. They can help you decide the best benefit structure to offer you optimal coverage.