There’s a lot of peace of mind that comes from knowing your enterprise is insured. But it is important to understand your business’s risks and what the many types of business insurance are designed to cover.
For example, understanding what general insurance is not intended to cover is just as important as understanding what it can cover. The ideal time to learn what’s covered and what’s not is before you purchase a policy. As you consider your policy purchase, determine what is excluded. As soon as you receive your general liability policy paperwork, it might be tempting to file it away and get to another challenge. But, before you let your guard down, take the time to be sure your policy covers everything you think it does.
Keep in mind the following exclusions found in nearly all general liability insurance policies.
General Liability Excludes Professional Liability
General liability insurance may be the most common kind of business liability insurance. Basically, it is designed to protect your company when someone alleges these were injured or their property was damaged as a result of your negligence.
A Business Owner’s Policy includes general liability insurance that covers bodily injury, property damage, personal injury and advertising injury. This often includes advertising copyright infringement; defamation of character, such as for example libel and slander; and invasion of privacy. general liability insurance A BOP also contains property insurance that covers both your personal and others’ business property.
What’s missing? Claims related to professional negligence or failure to execute your professional duties.
Lawsuits related to such claims have put many small companies out of business. In fact, for many professional services firms, the liability risk connected with professional errors & omissions and negligence can be far greater than the bodily injury and property damage risks included in a general liability policy.
To protect your organization against such claims, you would have to purchase separate professional liability insurance, often known as errors and omissions or E&O coverage.
Unfair or Discriminatory Employment Practices AREN’T Covered
An average commercial general liability insurance coverage also doesn’t cover unfair or discriminatory employment practices, including hiring and termination-related claims. Also excluded are any claims related to demotion, reassignment, employee evaluation, discipline, harassment, and other employment-related policies.
In short: if an employee alleges he / she was treated unfairly or that you acted illegally in your dealings using them, a general liability policy will usually not respond. These exclusions apply not only for employees currently on staff, but also to job applicants, contractors, and former employees who no more work for you.
If you’re concerned about claims linked to employment-related practices, you might like to look into buying employment practices liability insurance (EPLI), which covers your legal liability for a few claims related to wrongful termination, discrimination or sexual harassment.
If your business is similar to many smaller businesses, you occasionally depend on subcontractors to get the work done. If so, it’s important to be clear about how your present liability insurance pertains to your subcontractors – or even more importantly, how it could not.
With some insurance carriers, claims due to independent contractors focusing on your behalf aren’t covered by your general liability insurance coverage. However, some general liability plans are very broad and not just cover you, in case a contractor makes a mistake, but additionally cover the contractor directly. Obviously, is important to know in advance how you should expect your policy to execute.