You don’t need to be a business owner to benefit from a general liability insurance plan, nor do you have to be a homeowner. But if you are either, and especially if you are both, such broad insurance protection absolutely is one of the best plans for protecting against potential lawsuits and other financial issues.
A general liability plan provides protection for goods or services arising from commercial activities as well as property coverage in case damage or destruction of another person’s property occurs. Many people choose to work from home, and with the Internet facilitating the proliferation of home-based businesses, many business owners also choose to reduce overhead by engaging in commerce from their homes.
Whether doing online sales or providing a professional service, such as accounting or real estate sales, or perhaps simply engaging in commerce away from home, general liability policies offer property coverage as well as protection for potential liability arising from work performed or goods sold to others. Most commercial policies offer such combined coverages, and homeowners can request it as well if they have any kind of commercial activity tied to their homes, such as storage for landscaping services provided for other properties.
And if there are damages or other losses tied to the goods or services offered, the policy will pay up to stated limits and help prevent a possible lawsuit or other financial loss that could cause a bankruptcy filing. Among perils coverage are bodily injury, personal injury, property damage or other losses that negatively could impact a commercial enterprise regardless of its size.
Combining the two coverages under one policy helps make it more affordable while extending a broad range of protection at rates that are lower than they would be if bought in separate plans. The property portion of the plan reimburses others up to policy limits for any damages caused by the goods or services offered by the insured party. And the liability portion offers coverage only for possible lawsuits arising from business activities that cause a loss for customers or other people.
Although broad in nature, such policies do not apply to criminal acts, intentional acts or gross negligence. Gross negligence generally is defined as failing to act in a reasonable manner when a problem is known and a possible loss might occur. If aware of a faulty weld on a piece of heavy machinery and failing to fix the problem, for example, any loss arising from the potential failure of that equipment due to that bad well and any damage done likely would not be covered.
Still, having the combined coverage provided by such plans can mean the difference between staying in business and going bankrupt in the event of a lawsuit arising from general commercial activities.