Running a business comes with numerous risks, and as a business owner, you need to protect yourself from any unforeseen contingencies that may arise. There are several insurance policies available in the market today that can provide coverage for businesses of all sizes. Two of the most common types of insurance policies are general liability insurance and property insurance. While both policies offer protection against risks, they are not the same. In this article, we will examine the differences between general liability insurance and property insurance.
Definition of General Liability Insurance
General liability insurance is a type of insurance policy that provides protection for businesses against claims involving bodily injury, property damage or personal injury caused by the actions of the employees or the business itself. This insurance policy covers legal costs and fees that may arise during an investigation or lawsuit and also settlements or judgments that the business may be required to pay if found liable.
The policy usually covers losses resulting from accidents that occur on the business premises or at an event organized by the business. It also covers advertising injuries such as libel, slander, and copyright infringement.
Definition of Property Insurance
Property insurance, on the other hand, is an insurance policy that provides protection for businesses against damages or loss of property due to specified perils such as fire, theft, and natural disasters. The policy covers the cost of replacing or repairing the damaged property.
Types of Coverage Under General Liability Insurance
There are several types of coverage under general liability insurance. Some of these include:
1. Bodily Injury Coverage:
This type of coverage provides protection for businesses against claims or lawsuits arising from physical harm caused to another person while on the business premises.
2. Property Damage Coverage:
This type of coverage provides protection for businesses against claims or lawsuits arising from destruction of another person’s property while on the business premises.
3. Personal Injury Coverage:
This type of coverage provides protection for businesses against claims or lawsuits arising from non-physical harm to another person such as libel, slander, and false arrest.
4. Completed Operations Coverage:
This type of coverage provides protection for businesses against claims or lawsuits arising from work that has been completed and is later found to be faulty or defective.
Types of Coverage Under Property Insurance
There are several types of coverage under property insurance. Some of these include:
1. Fire Damage Coverage:
This type of coverage provides protection for businesses against damages caused by fire.
2. Theft Coverage:
This type of coverage provides protection for businesses against loss or damage due to theft.
3. Natural Disaster Coverage:
This type of coverage provides protection for businesses against damages caused by natural disasters such as hurricanes, earthquakes, and floods.
4. Business Interruption Coverage:
This type of coverage provides protection for businesses against loss of income due to business interruption caused by specified perils such as fire or natural disasters.
Differences between General Liability Insurance and Property Insurance
While general liability insurance and property insurance provide protection for businesses against different risks, there are several differences between the two policies. Some of these differences include:
1. Risks Covered:
General liability insurance covers risks such as bodily injury, property damage, and personal injury caused by the business or its employees, while property insurance covers risks such as damages or losses of property due to specified perils such as fire, theft, and natural disasters.
2. Cost:
The cost of general liability insurance varies depending on the industry, size of the business, and the level of risk involved. Property insurance costs depend on factors such as the value of the property, location, construction materials used, and the level of risk involved.
3. Coverage Limits:
General liability insurance has limits on the amount of coverage provided for each occurrence, while property insurance usually has a maximum limit on the total value of the property insured.
4. Legal Defense Costs:
General liability insurance covers legal defense costs and fees that may arise during an investigation or lawsuit, while property insurance does not cover legal defense costs.
5. Additional Coverage:
General liability insurance can be customized to include additional coverage such as product liability insurance, professional liability insurance, and cyber liability insurance, while property insurance can be customized to include additional coverage such as equipment breakdown insurance and inland marine insurance.
Conclusion
In conclusion, general liability insurance and property insurance are two important insurance policies that provide protection for businesses against different risks. While general liability insurance covers risks such as bodily injury, property damage, and personal injury caused by the business or its employees, property insurance covers damages or losses of property due to specified perils such as fire, theft, and natural disasters. Business owners should carefully consider their insurance needs and choose the appropriate policy to protect their business from any unforeseen contingencies that may arise.
