General Business Liability Insurance
If you have a business, you need general liability insurance. Period!
But how much do you understand about what that really means? Whether this is your first go-round or you are a seasoned business professional, if you have questions...ask. Every business is its own unique dynamic, and you want to know where the "sharks" are before they swim up and bite you!
What Your Policy Will Cover
If you are a business person, you take some risks every single day. What you buy insurance for is to keep you in business despite all kinds of hazards and potential trouble.
Lawsuits, Investigations, and Settlements
If damages are filed against you or you're sued, general liability covers your insurance company's investigation and attorney expenses, any judgement or settlement, medical expenses in case of injury, and any bonds if they must be subsequently posted.
Injury Damages
If anyone suffers a personal injury or damage to their property on your premises -- or from one of your products, your company operations, or even from your advertising (hard as that may be to image, some people will take personal issues with ads for various reasons!) -- this part of yoru coverage handles those claims.
Miscellaneous
Dozens of "odd" things happen to companies every day -- for example: someone sues your marketing department for copyright infringement, or files a claim on an accident that happened after an alcohol-fueled company party (This is part of your coverage as long as your company's business is not in the manufacturing or selling of alcoholic beverages!) For this and other quirky, unclassified claims, general business liability insurance is a "basket" where they can be sorted out.
What Your Policy Will Not Cover
General liability is a great form of coverage, but it cannot do everything. For example:
It does not cover employee injuries.
When workers get hurt on the job, that is not the bailwick of genera business liability -- that is the realm of the wonderful world of "workers' compensation". You will purchase protection for those claims under that separate workers' compensation policy.
It does not cover professional mistakes.
What does that mean? Well, if you are in the business of providing professional services to clients -- say, you are a veterinarian, accountant, counselor, advisor, architect, or the like --- your "professional mistakes" are not covered by general liability but by professional liability coverage. General liability's task is to take care of "goof ups" and/or disgruntled solutions, services, or recommendations in the everyday course of conducting business.
It does not cover car issues.
Do not think general business liability is a substitute for separate auto insurance for business; it is not! A hired auto (for cars your business rents) and non-owned auto endorsements will protect your company in case of a lawsuit, but that is all it will do. It does not cover damage to your owned or leased vehicles --- or provide personal protection for either you or your employees. Auto insurance exists for a reason; be aware of that and use it properly.
It does not cover punitive damages.
With very, very rare exceptions (did I mention they are rare -- they are), general business liability policies will not pay for punitive damages resulting from a lawsuit. You can catch "lightning in a bottle" and be one of the exceptions... but you do not want to shake your business on lightning!
It does not cover expected or intentional acts.
If something is an expected act or logical consequence -- or it is intended -- your business liability insurance will not shield you. Say, one of your employees "goes postal" and assault a customer. If that customer turns around and sues your business, you are one your own, business-liability-wise. But if a customer "goes postal" and jumps your employee, and your employee acts to defend him/herself or the company from a criminal act...that is covered. The difference -- one instance is interpreted as deliberate on your part: One is not. Simple, yes?
It does not cover the quality of your work.
A "workmanship" exclusion is a common part of this kink of policy because insurance companies do not take care of what is rightfully the area covered by warranty.
A Final Note: Insurable Risks vs. "Don't Even Go There" (or, the Duh!" clause)
Liability insurance covers the risk of being sued for negligence or strict liability torts, but not any tort or crime with a higher level of mens rea. In other words, if you are actively engaged in criminal activity, you cannot use liability insurance to cover the costs to defend yourself from the consequences of that activity.
This rule (which probably ought to be nicknamed the "duh!" clause!) exists so that criminals -- in particular, organized crime -- cannot use "insurance" to cover themselves when they are prosecuted by the state or sued by their victims. If such coverage were allowed, in effect, not only would "perps" have protection against consequences of deliberate acts, but insurance companies would profit from said crimes as well -- by allow criminals to buy the insurance!
Note: It should be noted that crime, per se is not uninsurable. It is covered by liability insurance, but by loss insurance. This, as its name implies, compensates victims of crime for their losses -- and is perfectly legal and ethical.
A Great First Step...Is Just That
In conclusion, general liability is a prudent first step in making sure your business stays solvent, productive, and well-respected in your world. Now, Let's talk about some more focused individual, and particular insurance products that should also be part of your complete business package.
Brian Cameron
Cameron Group, Inc
845-627-2130
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