June 29, 2016

Five Things You Need to Know About General Liability Insurance: 1) It Covers a Lot More Than You Might Think

In today’s post we start a new “Five Things You Need to Know” series on general liability or GL insurance.   General liability insurance is not oftentimes given much thought, and for sometimes, that is for good reason.  It covers a variety of nuisance claims, such as slip and fall cases, and even insurance professionals these days generally don’t get that excited about GL insurance. 

General Liability Insurance Covers a Lot More Than You Might Think.

 The lack of excitement about GL insurance, however, is rapidly changing on the backs of recent judicial decisions finding coverage for things that were always covered, but that were often missed or ignored.  The reason for this is that these old insurance policies cover much more than most people think.  For example, GL policies can cover such things as:

  1. copyright claims;
  2. IP claims;
  3. business torts;
  4. unfair business practices claims; and
  5. many other kinds of business to business claims

 Bodily Injury and Property Damage coverage under GL policies has historically been given a great deal of attention for such things as environmental and asbestos claims.  What is often overlooked, however, is the third prong of coverage — coverage for Advertising and Personal Injury claims.  This is where a slew of recent court decisions found coverage for cyber liability claims, at the same time other courts were holding that massively hyped cyber policies did not even cover, you got it, cyber-claims.   

 We hope that you enjoy today’s video.  If you have any questions, please check back for the rest of the series, or call us to discuss your particular case.

For a transcript of this video, please see below

A lot of folks don’t pay much attention to general liability insurance, perhaps for good reason. General liability insurance is slip and fall insurance. You got a small business, somebody comes in and sprains their ankle, “Ouch, ouch, I’m going to sue you.” They sue you, insurance company sends a lawyer to defend you and it goes on for 6 months and they settle it for $20,000 and everything’s fine. That’s small stakes stuff, that’s what general liability insurance does cover. It’s not all that exciting, it’s not the kind of stuff we do but some people think about general liability insurance that way. It covers a lot more than you might think. Yes, you have a slip and fall case, we all know it covers that, but what else does it cover?

It covers copyright type claims, it covers IP claims of all sorts, it covers business torts, unfair business practices, things like that. General liability insurance policy generally has, well it has more than 3 parts, but it has 3 important parts. Bodily injury coverage. That’s, “Oh no I hurt my foot. I’m going to sue you.”

Second thing it covers is property damage. “Warehouse down the street burnt down and the fire jumped onto my property and burned my place down too.” That’s some third party damaging your property. That’s covered.

Under the bodily injury piece, over the years there’s been a lot of asbestos lawsuits, that’s where that sticks, bodily injury. There’s been a lot of environmental lawsuits, well that could be bodily injury or property damage. You know, you had a toxic waste dump that had issues over the years and it might have damaged someone’s neighboring property. That’s classic property damage, or it might have injured somebody, they might have ingested something that harmed them. That’s classic bodily injury.

The core of what we do is look at some of these other areas that folks might not think about in general liability insurance. That gets me to the third prong of coverage under general liability insurance, personal and advertising injury coverage. Some big partner at some law firm my first law job said, “Take a look at the personal injury coverage.” I was like, “What on earth could that be?” I mean this was like right out of law school, so I read it and I went back to her and I said, “Oh it says this.” She said, “Well, does it cover anything?” I was like, “I have no idea, let me go back and look.” I go back and look at it, and we went through this a little bit, it was very fortunate training. She was a very good lawyer and she was sort of training my thought process and how to spot potential coverage.

I looked at it and finally I got it. There was advertising injury coverage in there for advertisements, and it was really broad. I looked at the underlying lawsuit this company was sued for and it related to, it had a little bit of advertising in it. Sure enough, that was enough to get it covered. Over the years we’ve found coverage for copyright claims, IP claim, intellectual property claims, and all kinds of other business torts.

My point I guess, my main point is when you think general liability insurance don’t think the boring stuff, think the really interesting stuff about how this could cover new age tort claims against businesses. The kinds of things that are faced by Silicone Valley companies, privacy liability claims. Any company that advertises or does work on the internet, advertising injury claims. This is really good stuff, but you have to know where to look to find it.


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