how is liability insurance different from general liability insurance
May 17, 2018
Liability coverage is a specialized form of commercial insurance, designed to cover the legal liabilities of the policyholder in incidents or events covered by the policy. Business owners, in fact, have two main types of liability insurance to choose from: General Liability Insurance (GL) and Public Liability Insurance (PLI). each type has its own advantages, and the experienced insurance agents of u.s. risk can help guide your clients in choosing the right type of policy for their unique business needs.
civil liability insurance
Personal liability insurance, or pli, is designed to protect business owners and their assets against losses associated with injuries, loss or damage to property and other losses suffered by members of the public and/or third parties while found in commercial facilities. this may include visitors to an office building, delivery personnel, and customers of a retail establishment. pli is considered the “starting point” for most businesses, especially those geared towards retail or public access, and can be viewed as a form of minimal business insurance coverage.
general liability insurance
General liability insurance, or gli, typically covers a wide range of potential legal issues for business owners. Policy language includes public liability coverage or the coverage associated with a stand-alone PLI policy. This insurance is designed to protect against liability arising from defective products, accidents at work, negligence and injuries suffered by both employees and members of the public, such as visitors to a company or its customers. A gli policy can also cover payments for medical and legal expenses. municipalities and states often require gli policies as a condition of granting a business operating license.
pli vs. gli
As with any contrast between two different types of insurance policies, there are strengths and weaknesses associated with pli and gli. pli policies represent a minimum amount of liability coverage, which covers liabilities against public claims for injuries, negligence and accidents. As such, these policies tend to be relatively inexpensive. however, these policies are limited in that they cover liabilities only for members of the public; pli does not protect against claims arising from the company’s employees, investors or suppliers. Any expense that exceeds the coverage of the policy is the responsibility of the business owner.
gli, on the other hand, is more comprehensive in the sense that such a policy protects against losses suffered by the public, as well as by suppliers, employees and even the owners of the company. These policies tend to be substantially more expensive than PLI policies, often putting them out of reach for small and medium-sized business operations. the additional expense means a higher level of coverage, however, covering most foreseeable losses and protecting company assets in the event of a catastrophic event.
Many business owners may not understand the differences between the two, or even know there is a difference. They will want to understand what type of policy is best suited to the needs of your operation and its potential risks, and as their insurance agent, they will look to you for the answers. ◼