Insurance Requirements

General Liability

What is General Liability Insurance? Why do I need it?

• Proper insurance including General Liability is a mark of a well-run, professional company
• Shows prospective clients you care about their protection, helps you get more jobs
• California law requires you to state on your bids whether you have General Liability or not
• Protects your home and finances in the case of a claim against you
• Policies include the cost to defend you in the case of a claim

What does it cover?

• Coverage protects you from claims of property damage, losses from your work both ongoing and once the work is completed, bodily injury.
• It does not include the cost to redo faulty work, only the damage from it
• Includes coverage against slander, libel, invasion of privacy, advertising of services
• Includes protection for services you render or products you sell.
  
• Protection against claims at your offices, such as “slip and fall” claims
  
• Medical expenses
  
• Coverage can include judgments, attorney fees, court costs, or other related expenses.

What do the limits on a policy mean?

• All policies include two numbers which show the maximum amounts the insurance company is liable to pay out in damages.
  
• The OCCURRENCE limit is normally the first number listed or stated. A common limit is $1,000,000. This represents the maximum amount that could be paid out in the case of a claim or incident.
• The AGGREGATE limit is often twice the amount of the Occurrence, for example $2,000,000. This limit shows the total amount the policy will pay for all claims that arise during the policy year.
• Example: Under a $1,000,000/$2,000,000 policy you could have two $1,000,000 losses paid under the policy.
• This is a very important part of your GL policy. If you are asked to have a $1,000,000 policy this is normally the Occurrence limit one is asking for. Make sure you are not sold a $500,000/$1,000,000 policy. This will not meet your needs. Some unscrupulous brokers will try and sell this to lower the price slightly.
• The aggregate is important if you have a large loss, e.g. $1,000,000. Your policy limits will not be used up. Even though you are involved in a large claim you can still keep working.

This is only a general summary of the coverage of this type of policy. You should refer to the actual policy for coverage limits, exclusions and other conditions.