Your business, whatever it makes, sells or advises on
While the policy is in force, and on a claims-made form the reporting window after it ends
The forms and endorsements listed on your own declarations page
Business liability insurance, in plain language
What a business liability policy covers, and what it leaves out
General, professional and product liability policies, explained in plain words: what each one is built to pay for, what it excludes, and how the declarations, coverage form, conditions and endorsements fit together into one policy.
- General liability
- Professional liability
- Product liability
- Umbrella and excess
Coverage part I
The questions behind a liability policy
Plain questions a business owner asks when a policy, a client contract or a claim puts liability insurance in front of them.
- A.
What does general liability insurance actually cover?
- B.
What is the difference between general liability and professional liability?
- C.
Does product liability apply if I only resell something another company made?
- D.
What is the difference between an occurrence policy and a claims-made policy?
- E.
What do the "each occurrence" and "aggregate" limits on a declarations page mean?
- F.
What is an additional insured endorsement, and why does a client ask for one?
- G.
Is an injury to one of my own employees covered by my liability policy?
- H.
What does a liability policy exclude, and why are those exclusions there?
Coverage part II
The liability coverages a business meets
Most liability questions come back to one of these coverages, each written to answer a different kind of claim.
General liability
Bodily injury and property damage that your premises or operations cause to other people, plus personal and advertising injury such as libel, slander or using someone else's advertising idea.
Professional liability
Claims that your advice, design or professional service was wrong, late or never delivered. Often called errors and omissions.
Product liability
Injury or damage caused by something you make, sell or distribute, usually written as the products and completed operations part of a general liability policy.
Umbrella and excess liability
Further limits that sit above the underlying liability policies and respond once those limits are used up.
Coverage part III
What liability policies leave out
Exclusions are where a policy shows its real shape. Standard liability forms share a common set of them.
Expected or intended injury
Harm the insured meant to cause, or expected to happen. Insurance is written for accidents.
Contractual liability
Liability you agree to take on in a contract, apart from the "insured contracts" the form defines and gives back.
Injury to your own employees
Left to workers' compensation and employer's liability cover rather than a general liability policy.
Pollution
Most pollution claims, which usually call for a separate environmental policy.
Autos, aircraft and watercraft
Vehicles you own or use, which belong on a commercial auto or other dedicated policy.
Your own work and your own product
The cost of repairing or replacing your faulty work or product, as opposed to the damage it causes to someone else.
Professional services
Often removed from a general liability policy by endorsement, which is the gap professional liability is there to fill.
Coverage part IV
How the parts of a policy fit together
A liability policy is a stack of documents. Reading them in order is the quickest way to find out what is covered.
- DEC
Declarations
Who is insured, the policy period, the limits and the list of forms that make up the policy.
- CF
Coverage form
The insuring agreement: what the insurer promises to pay for, and the duty to defend.
- EXC
Exclusions
What the insuring agreement does not reach, however the claim is worded.
- CON
Conditions
What you have to do for the cover to respond, such as reporting a claim promptly.
- DEF
Definitions
The words in quotation marks, which mean what the definitions section says and nothing wider.
- END
Endorsements
Later pages that add, remove or change cover, and win where they conflict with the form.
Conditions
The conditions every explanation is written under
They qualify every explanation of a policy in the way a policy's own conditions qualify its coverage.
- 1.
No scores or ratings
Where one kind of policy suits a business better than another, the reason is given in words. Nothing is graded.
- 2.
Words, not quotes
Premiums and limits depend on the business, the state and the insurer, so no figure here stands in for a quote.
- 3.
Your policy governs
Forms differ between insurers. Where the wording of your policy disagrees with a general explanation, your policy is what applies.
- 4.
Explanation, not advice
Plain-language explanation is not legal advice or a coverage opinion. A licensed agent or broker can confirm what your own policy does.
- 5.
Commission is disclosed
Where a page carries an affiliate link, it says so. A commission never decides how a policy is explained.
Background on who publishes these explanations is on the about page.