Insurance policies generally include different categories of limits. Each category determines how much financial protection is available for particular claims or during a specified policy period. Understanding these limits helps businesses evaluate the extent of their coverage and identify situations where additional protection may be necessary.
Common general liability insurance limits include:
Each Occurrence Limit: This represents the maximum amount an insurer will pay for a single covered incident involving bodily injury or property damage.
General Aggregate Limit: This is the maximum amount the insurer will pay for covered claims during the policy period, excluding certain claims that may have separate limits.
Products and Completed Operations Aggregate: This limit applies to covered claims arising from products sold or work completed by a business.
Personal and Advertising Injury Limit: This determines the maximum coverage available for qualifying claims involving offenses such as libel, slander, or certain advertising-related injuries.
Medical Payments Limit: This covers eligible medical expenses for third parties who experience accidental injuries on business premises or because of certain business operations, regardless of fault, subject to policy conditions.
The actual limits depend on the insurance agreement. Businesses should examine the declarations page to identify the applicable amounts, coverage categories, and policy period. Higher limits may provide greater financial protection, but they do not automatically expand the types of incidents covered.
General liability insurance does not cover every type of business-related loss or legal responsibility. Policy exclusions identify specific circumstances, activities, and damages that fall outside the coverage provided by the insurer. These restrictions help define the boundaries of the insurance agreement.
Exclusions can vary between insurance providers and policy forms. Understanding them is important because businesses may need separate insurance policies to address risks that are not included in general liability coverage.
Common exclusions include:
Employee Injuries: General liability insurance generally excludes injuries or illnesses suffered by employees during their employment. Workers compensation insurance typically addresses these situations.
Professional Errors: Claims involving professional negligence, incorrect advice, or mistakes in specialized services are generally excluded and may require professional liability insurance.
Intentional Acts: Injuries or property damage caused intentionally by an insured party are generally not covered.
Pollution: Many general liability policies exclude certain claims involving pollution, contamination, or the release of hazardous substances.
Automobile Accidents: Liability arising from business-owned or operated vehicles is generally excluded and addressed through commercial auto insurance.
Contractual Liability: Certain responsibilities assumed through contracts may be excluded, although some contractual liabilities can qualify for coverage under specified policy provisions.
Damage to Owned Property: General liability insurance generally does not cover damage to property owned by the insured business.
Expected or Intended Injury: Bodily injury or property damage expected or intended from the insured's perspective is generally excluded, subject to applicable policy language.
Businesses should carefully review the exclusions section, endorsements, and definitions included in their insurance contracts. Some exclusions contain exceptions or specific conditions that affect how individual claims are evaluated. Coverage also depends on the circumstances of the incident, applicable policy wording, and the nature of the reported loss.