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Liability Insurance – General vs Public

by Dave Collins on December 13, 2016



Liability Insurance: General vs. Public

In the world of liability, there are two different types of insurance: general liability insurance and public liability insurance. Both can cover many different types of businesses. However, there are some differences between general liability insurance and public liability. Let’s take a look at the differences between each.

Price

The first huge difference between general and public liability insurance is the price. General liability insurance (GLI) is often much more expensive than public liability insurance (PLI). Because GLI covers everything that may occur within general business operations — including catastrophic events, bodily injury, intellectual property infringement, product liability, and personal injury — the coverage is much more comprehensive than PLI.

This comprehensive coverage and the large price involved often makes GLI too much insurance — and price — for small and medium sized businesses. For this reason alone, public liability insurance is often a better fit for smaller companies. The premiums can run as low as a few hundred dollars per month but offer small companies an immeasurable peace of mind.

Coverage

GLI, as mentioned above, covers everything from catastrophic events to bodily injury, intellectual property infringement to product liability, and personal injury to product loss. Basically, the comprehensive insurance covers everything except worker’s compensation and professional liability.

PLI, on the other hand, only covers the liability of a customer’s injury while on the business property. This means that any injury suffered by a third party on the property and the legal fees associated with the injury are covered by the insurance company. For many small companies, this coverage can be the difference between a business staying in business or going bankrupt.

Limitations

GLI is mainly limited in the few items it does not cover, like worker’s compensation and professional liability. Of course, the high price itself is also a limitation, keeping smaller companies from being able to afford general liability insurance.

Limitations on PLI are somewhat extreme. Public liability insurance does not cover businesses against employee, investor or vendor claims, and additional insurance needs to be purchased to cover these types of claims. Limitations on expenses are also common with PLI, so businesses may have to cover some expenses associated with claims.

Suggested Liability Insurance by Business

With price, coverage and limitations in mind, it is easy to see where public liability insurance outweighs general liability insurance: with the small business owner. Those businesses who have limited funds but need legal protection from third party accidents on the business property are better fitted with a public liability insurance policy.

However, large businesses with higher capital amounts to protect and more potential claims are better fitted for general liability insurance. The comprehensive coverage will help larger businesses cover any potential liabilities, at an affordable cost for a large corporation.

Overall, public liability insurance is often the more common, more affordable insurance for businesses. It can protect small and medium sized businesses from bankruptcy in third party liability cases, easing the mind of business owners and helping them serve their customers best.


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