General Liability Insurance
Real-world general liability claims by industry
Understanding how GL coverage responds to actual incidents helps you evaluate your risks and coverage needs. These scenarios illustrate common claims across different industries.
General liability claims can range from minor slip-and-falls to multi-million dollar lawsuits. The scenarios below show how coverage typically responds and what lessons businesses can learn.
Customer slip-and-fall on wet floor
What Happened
A customer slipped on a recently mopped floor without warning signs, suffering a broken hip. They required surgery and months of physical therapy, then sued the store for negligence.
Coverage Response
GL covered the defense costs and $85,000 settlement for medical bills and pain/suffering under the bodily injury coverage. The store's deductible was $1,000.
Key Takeaway: Always post wet floor signs and document cleaning schedules. Quick incident response and documentation helped the insurer settle favorably.
Food poisoning outbreak affects multiple diners
What Happened
Improper food storage led to 12 customers experiencing food poisoning. Several required hospitalization. Health department cited the restaurant, and affected customers filed claims.
Coverage Response
Products-completed operations coverage responded to the bodily injury claims. GL paid defense costs and settlements totaling $150,000. The restaurant faced additional fines not covered by insurance.
Key Takeaway: Food safety protocols are critical. Insurance covered customer injuries but not regulatory fines or reputational damage.
Property damage during renovation
What Happened
A plumber accidentally damaged a homeowner's hardwood floors while replacing a water heater. Water leaked for hours before discovery, warping floors throughout the first level.
Coverage Response
Property damage coverage paid for floor repairs and temporary housing while work was completed. Total claim: $45,000 including $5,000 for hotel costs.
Key Takeaway: Check your work before leaving job sites. The contractor's thorough documentation and quick response to the homeowner helped resolve the claim smoothly.
Defamation claim from competitor mention
What Happened
In a blog post, a consultant made unflattering comparisons to a competitor. The competitor sued for defamation and trade libel, claiming lost business.
Coverage Response
Personal and advertising injury coverage defended the lawsuit. After 18 months of litigation, the case was dismissed. Defense costs totaled $75,000, covered by GL.
Key Takeaway: Be careful with competitor comparisons in marketing. Even winning a lawsuit is expensive—the coverage for defense costs proved invaluable.
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