General Liability Insurance Key Terms

Explore general liability insurance terms

General liability insurance is a required form of insurance for all businesses. It protects the business from lawsuits against them from accidents. There are various important terms found in these liability insurance policies including conditions, binder and subrogation. It is also important to know some of the coverage types available for general liability, including medical payments and personal and advertising injury liability.

Aggregate limit of indemnity

Some general liability insurance policies will have an aggregate limit of indemnity, or the sum insured. That means the payout on the policy will cover a specific amount on one claim, but that is also the total dollar amount paid within the policy year.


Conditions are usually listed in any type of general liability insurance. The conditions are the terms and stipulations of the rights of the insured during the policy period. As the insured, it is essential to understand these conditions to ensure the property or person is fully protected.


The binder term is used within the liability policy. It is a temporary agreement that states that the policy is in effect. Often, there is a limited amount of time when the individual or item is unable to be protected, which is when the binder would be usable.


The term subrogation is used in insurance policies when defining the right of the insurance company to pursue legal action in the name of the insured policyholder. For example, should an insurance company need to sue another insurance company involved in or causing an accident, in the name of the insured party, they can do so because of subrogation.

Medical payments

Medical payments may be available as additional coverage in a general liability insurance plan. It pays the medical costs of the insured party and passengers in the vehicle if they are injured in an accident caused by an insured party. Some states require this type of coverage

Personal and advertising injury liability

Personal and advertising injury liability may be added to a general liability policy. It protects the business from harm done through the advertising of its product or service.

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