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What Does General Liability Insurance Not Cover?

Worried about property damage, personal injury, or even reputational damages? General liability insurance is an effective protection against all these risks and much more. This is why it can be a vital safety net for any business.

However, while general liability is wide-ranging, you and your business aren’t completely protected from every possible damage or loss. Here, we’ll dive into the limitations of general liability insurance to learn whether this coverage is the best option for you.

General Liability Insurance Coverage

With liability claims being one of the most commonly filed cases at insurance companies, many business and property owners see general liability insurance coverage as indispensable. It’s a great investment for the long run, especially for small companies and individual property owners.

Many businesses are liable for third-party injuries, but with general liability insurance, you won’t have to worry about the cost of medical services, legal fees, lost wages, or settling costs of those who get injured on your premises.

Some insurers include product liability in the general liability insurance policy as well. This provides protection against claims regarding products manufactured, distributed, or sold by your company, including manufacturing defects.

General liability insurance also pays for the replacement or repair of damaged property. It can reimburse legal fees, court-awarded payments, settlements, damages, and every cost associated with a legal liability case.

Property damage claims are rather frequent and can cause many headaches unless you have general liability coverage to pay for your legal fees and repair or replacement costs.

Another benefit of this insurance is protection against reputation damage and advertising injuries. For businesses, this is automatically added to the commercial insurance policy to shield against defamation, false advertising, stolen ideas, copyright infringement, invasion of privacy, libel, and slander.

It can have limitations depending on the particular policy, but it can still pay dividends if your potential risks are high and you can’t afford to pay for losses or damages out of pocket.

What Commercial General Liability Insurance Doesn’t Cover

Despite all the benefits listed, commercial liability has its limitations. If your risks for certain liabilities that aren’t covered by this policy are higher than usual, it might be a good idea to purchase additional coverage to have the complete protection you require.

While the coverage may vary depending on the insurer, general liability policy typically won’t cover the following:

Automobile Accidents – If you run a business in which you or one of your employees cause an accident using the company vehicle, you won’t be covered by your general liability policy. The same applies to accidents caused while driving your personal vehicle. You need commercial auto insurance to pay for the damages, medical bills, and legal fees. Business-specific policies are recommended, as these can be tailored based on the number of drivers, equipment, and more.

Damage to Business Premises – This policy won’t provide financial coverage for the physical loss of or damage to your property at the business’s physical location, nor will it help you keep your business location and its contents safe from vandalism, fire, or theft. For this, you’ll need to purchase a building insurance policy.

Damages Above Your Policy Limit – As with any other insurance policy, general liability insurance also has a policy limit. This will be stated in your contract and will generally depend on your monthly premium. The policy limit applies to any excess that is otherwise covered by the policy. An add-on or a separate excess liability coverage can help extend the coverage of your initial policy.

Errors and Other Omissions – If you’re sued by someone because you failed to deliver something under a contractual obligation, your legal fees and other costs won’t be reimbursed by general liability insurance. This applies to products, services, leases and rental agreements, and any other commercial contract. Instead, you’ll need errors and omissions insurance.

Cybersecurity Breaches – These are specific risks that are only covered by policies like cyber liability insurance. This is because the covered losses include a variety of damages like system restoration, legal costs, forensic investigation costs, regular notifications, reputation recovery, and more.

Intentional Criminal Acts – Not surprisingly, general liability insurance doesn’t cover damages or losses you incur because of intentional criminal acts you’ve committed.

Patent Violation – Patent infringements or using another inventor’s products or services without compensating them can cause legal issues. They can sue you, and you’ll have to pay out of pocket for your legal costs.

Professional Consultant Services – Anyone providing these services needs professional liability coverage because the general policy won’t cover damage or losses you incur due to improper services.

general liability insurance doesn’t cover

Final Thoughts

While general liability provides vital coverage for business and property owners, it has limitations. As we’ve seen above, depending on your type of business, you may need other forms of insurance to ensure you’re completely covered.

While it can be tempting to try and save money by not getting all types of insurance, it can leave you vulnerable to huge financial risks. If you need extra insurance coverage or simply need more advice, then contact Marathon Insurance Group today, and we’ll be more than happy to help.

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