There’s a lot of satisfaction that comes from knowing your small business is insured. But it is essential to comprehend your business’s risks and what the various types of business insurance are designed to cover.
For example, understanding what general insurance isn’t intended to cover is simply as important as understanding what it can cover. The ideal time and energy to learn what’s covered and what’s not is before you purchase a policy. As you take into account your policy purchase, determine what is excluded. As soon as you receive your present liability policy paperwork, it may be tempting to file it away and move on to another challenge. But, before you let your guard down, take the time to be sure your policy covers all you think it does.
Keep in mind the following exclusions found in almost all general liability insurance policies.
General Liability Excludes Professional Liability
General liability insurance is the most common type of business liability insurance. Basically, it really is designed to protect your organization in the event that someone alleges they were injured or their house was damaged due to your negligence.
A SMALL 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 libel and slander; and invasion of privacy. A BOP also includes property insurance that covers both your personal and others’ business property.
What’s missing? Claims linked to professional negligence or failure to execute your professional duties.
Lawsuits related to such claims have put many small companies out of business. Actually, for most professional services firms, the liability risk associated with professional errors & omissions and negligence can be far greater compared to the bodily injury and property damage risks included in a general liability policy.
To protect your business against such claims, you’ll need to purchase separate professional liability insurance, often known as errors and omissions or E&O coverage.
Unfair or Discriminatory Employment Practices Are Not Covered
An average commercial general liability insurance policy also doesn’t cover unfair or discriminatory employment practices, including hiring and termination-related claims. Also excluded are any claims linked to demotion, reassignment, employee evaluation, discipline, harassment, along with other employment-related policies.
In short: if an employee alleges they 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 additionally to job applicants, contractors, and former employees who no more work for you.
general liability insurance If you’re worried about claims linked to employment-related practices, you may want to look into buying employment practices liability insurance (EPLI), which covers your legal liability for a few claims linked to wrongful termination, discrimination or sexual harassment.
If your business is similar to many small businesses, you occasionally rely on subcontractors to get the work done. If so, it’s important to be clear about how your general liability insurance applies to your subcontractors – or more importantly, how it could not.
With some insurance carriers, claims caused by independent contractors working on your behalf aren’t covered by your general liability insurance coverage. However, some general liability insurance policies are very broad and not only cover you, in case a contractor makes a mistake, but also cover the contractor directly. Obviously, is essential to know in advance the way you should expect your policy to perform.