General Liabilities – business ownership comes with a plethora of responsibilities, one of which is understanding the different types of liabilities that could arise. As a business owner, it is essential to be aware of the risks that come with running a company. General liabilities, in particular, are a common concern for most business owners. These liabilities refer to any legal obligations that a business may face, such as lawsuits, property damage, or injury claims. Without proper knowledge of general liabilities, your business could face significant financial losses and even legal action. That’s why it’s crucial to stay informed about the different types of general liabilities and how to avoid them. In this article, we’ll discuss the most common general liabilities every business owner should know about to help you protect your business and ensure its success. Click here for liability quote for your business.

What Are General Liabilities?

General liabilities refer to any legal obligations that a business may face. These liabilities can be caused by a wide range of issues, such as property damage, injury claims, or lawsuits. General liability insurance is designed to protect businesses from these types of risks. This insurance policy typically covers expenses related to legal defense and damages awarded to the plaintiff. Without proper coverage, a business could face significant financial losses and even bankruptcy.
General liabilities can occur in any industry, but some industries are at a higher risk than others. For example, businesses that provide services or products to customers are more likely to face liability claims than businesses that provide services to other businesses. It’s important to note that general liability insurance does not cover all types of liabilities, such as professional liability or cyber liability. Business owners should consider additional coverage to protect their business from these types of risks.

Types of General Liabilities

There are several types of general liabilities that business owners should be aware of. These include:

Bodily Injury Liability

Bodily injury liability refers to any legal obligation that a business may face if a person is injured on their property or as a result of their products or services. This liability can arise from slip and fall accidents, defective products, or any other accident that results in bodily harm.

Property Damage Liability

Property damage liability refers to any legal obligation that a business may face if their products or services cause damage to a person’s property. This liability can arise from accidents, such as fires or floods, or from defective products.

Personal and Advertising Injury Liability

Personal and advertising injury liability refers to any legal obligation that a business may face if they are accused of slander, libel, or copyright infringement. This liability can arise from advertising practices, such as using false or misleading information in marketing materials.

Products and Completed Operations Liability

Products and completed operations liability refers to any legal obligation that a business may face if their products or services cause harm to a person or property after they have been sold or completed. This liability can arise from defective products or services that were not properly maintained.

Liquor Liability

Liquor liability refers to any legal obligation that a business may face if they are accused of serving alcohol to a person who is already intoxicated. This liability can arise from accidents or injuries that occur as a result of the person’s intoxication.

Importance of Understanding General Liabilities

Understanding general liabilities is essential for any business owner. Without proper knowledge of these liabilities, a business could face significant financial losses and even legal action. General liability insurance is designed to protect businesses from these types of risks, but it’s important to understand what is and isn’t covered by the policy. Business owners should also take steps to minimize their risks, such as implementing safety protocols and properly training employees.
Additionally, understanding general liabilities can help businesses make informed decisions about partnerships, contracts, and other business agreements. By understanding the potential risks and liabilities involved, businesses can make more informed decisions that protect their interests.

Common Examples of General Liabilities

General liabilities can occur in any industry and can be caused by a wide range of issues. Here are some common examples of general liabilities that businesses may face:

Slip and Fall Accidents

Slip and fall accidents are a common cause of bodily injury liability for businesses. These accidents can occur in any location, such as a retail store, restaurant, or office building. Businesses can minimize their risks by implementing safety protocols, such as regularly cleaning floors, installing handrails, and properly maintaining equipment.

Defective Products

Defective products can cause bodily injury or property damage liability for businesses. These liabilities can arise from defects in design, manufacturing, or marketing. Businesses can minimize their risks by properly testing products and providing adequate warnings and instructions for use.

Copyright Infringement

Copyright infringement can cause personal and advertising injury liability for businesses. This liability can arise from the unauthorized use of copyrighted material, such as logos, images, or music. Businesses can minimize their risks by properly licensing and attributing copyrighted material.

Employee Accidents

Employee accidents can cause bodily injury or property damage liability for businesses. These accidents can occur in any workplace, but businesses can minimize their risks by providing proper training and equipment and implementing safety protocols.

Intoxicated Customers

Intoxicated customers can cause liquor liability for businesses. This liability can arise from accidents or injuries that occur as a result of the person’s intoxication. Businesses can minimize their risks by implementing strict policies for serving alcohol and properly training employees to recognize signs of intoxication.
How to Protect Your Business from General Liabilities
Protecting your business from general liabilities requires a proactive approach. Here are some steps that businesses can take to minimize their risks:

Implement Safety Protocols

Implementing safety protocols is one of the most effective ways to minimize general liabilities. Businesses should regularly evaluate their workplace and implement safety measures, such as providing proper equipment and training employees on proper procedures.

Properly Train Employees

Properly training employees is essential for minimizing general liabilities. Employees should be trained on safety procedures, customer service practices, and other relevant topics. Employers should also provide ongoing training to ensure that employees stay up-to-date on best practices.

Obtain General Liability Insurance

Obtaining general liability insurance is essential for protecting your business from general liabilities. This insurance policy typically covers expenses related to legal defense and damages awarded to the plaintiff. Business owners should carefully review their policy to understand what is and isn’t covered.

Consider Additional Coverage

In addition to general liability insurance, businesses may need additional coverage to protect themselves from other types of liabilities, such as professional liability or cyber liability. Business owners should assess their risks and consider additional coverage as needed.

Review Contracts and Agreements

Reviewing contracts and agreements is essential for protecting your business from liabilities. Businesses should carefully review any legal agreements before signing them to ensure that they understand their obligations and liabilities.

Insurance Options for General Liabilities

General liability insurance is designed to protect businesses from the most common types of general liabilities. However, there are several other insurance options that businesses may need to consider to protect themselves from other types of risks.

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, is designed to protect businesses from liabilities related to professional services. This insurance policy typically covers expenses related to legal defense and damages awarded to the plaintiff.

Cyber Liability Insurance

Cyber liability insurance is designed to protect businesses from liabilities related to cyber attacks or data breaches. This insurance policy typically covers expenses related to legal defense and damages awarded to the plaintiff.

Product Liability Insurance

Product liability insurance is designed to protect businesses from liabilities related to defective products. This insurance policy typically covers expenses related to legal defense and damages awarded to the plaintiff.

Legal Considerations for General Liabilities

Business owners should be aware of the legal considerations involved in general liabilities. Here are some legal considerations to keep in mind:

Statutes of Limitations

Statutes of limitations are the time limits that plaintiffs have to file a lawsuit. Business owners should be aware of the statutes of limitations in their state and ensure that they take appropriate action within the required time frame.

Joint and Several Liability

Joint and several liability is a legal principle that allows plaintiffs to collect damages from multiple parties involved in a lawsuit. Business owners should be aware of joint and several liability and take appropriate steps to minimize their risks.

Vicarious Liability

Vicarious liability is a legal principle that holds employers responsible for the actions of their employees. Business owners should be aware of vicarious liability and take appropriate steps to minimize their risks, such as properly training employees and implementing safety protocols.

Handling General Liability Claims

Handling general liability claims requires a proactive approach. Here are some steps that businesses should take when facing a general liability claim:

Notify Your Insurance Company

Businesses should notify their insurance company as soon as possible when facing a general liability claim. The insurance company will provide guidance on how to proceed and may appoint legal counsel to handle the case.

Gather Information

Businesses should gather as much information as possible about the incident that led to the claim. This information can include witness statements, photographs, and other relevant documents.

Cooperate with the Investigation

Businesses should cooperate with any investigations related to the claim. This includes providing information to the insurance company and legal counsel and responding to any requests for information.

Consider Settlement Options

Businesses should consider settlement options when facing a general liability claim. Settlements can be a cost-effective way to resolve the claim without going to trial.

General Liabilities: Conclusion

General liabilities are a common concern for most business owners. Without proper knowledge of general liabilities, your business could face significant financial losses and even legal action. Business owners should be aware of the different types of general liabilities and take steps to minimize their risks, such as implementing safety protocols, properly training employees, and obtaining general liability insurance. By understanding general liabilities, businesses can make informed decisions that protect their interests and ensure their success.