General liability insurance is an essential part of any business owner's insurance needs. It provides coverage for any property damage or physical injury that your business may cause to a third party. However, it's important to note that general liability insurance does not cover all areas of risk. In this article, we'll discuss what isn't covered under a liability policy and what additional policies you should consider for your business.
Most business owners hear the phrase “general liability insurance” and assume that they are safeguarded against “general liabilities.” This assumption couldn't be further from the truth. The fact is, as a business owner, your general liability insurance coverage isn't enough to protect your business from all foreseeable risks. Liability insurance is one of the most useful types of insurance coverage you can have for your business, so it's included in a traditional BOP (along with property insurance and business interruption insurance). However, there are still significant areas of risk that a general liability policy leaves unprotected. General liability insurance will not cover your company's equipment or property against theft or damage.
You need a commercial property insurance policy to cover these types of issues. Injuries caused by intentional or illegal acts will not be covered by general liability insurance either. Another area of risk that is often overlooked is liability for defective products. If one of your products causes bodily injury or property damage, general liability insurance would take effect. General liability insurance coverage extends to customers, but not to employees.
For that, you need workers' compensation insurance. No matter what type of business you have, there are some additional policies that are just as vital. An obvious example would be that of a doctor who messes up a serious operation, but even retailers and technology companies need E&O (Errors & Omissions) insurance. What would happen if your IT company recommended a certain brand of virus protection and a customer suffered a data breach? Or did you overlook an obvious problem during a routine home inspection and now the landlord has water falling through the roof? Even if you hate to admit it, no one is perfect; E&O insurance can help you fix things if something goes wrong. General liability insurance won't cover you for damage, theft, or commercial car accidents related to a hurricane either.
To protect your business property, you'll need commercial property insurance (which is normally included in a BOP package), commercial auto insurance, flood coverage, alcoholic beverage liability, and any other form of coverage your business dictates. Your local independent insurance agent can advise you on which policies are best for you. Employee discrimination lawsuits happen all the time too. If you have any employees, internship liability insurance is a necessary part of your insurance arsenal. EPLI (Employment Practices Liability Insurance) protects against lawsuits from interviewees, employees and former employees who accuse their company of harassment or discrimination.
As a general rule, the independent contractors you hire are not covered by your general liability policy. If you want to cover them, you'll have to add them to your policy. Otherwise, they can purchase their own general responsibility plan. General liability insurance is good to have, but it shouldn't be your company's only form of protection. When it comes to risks, your company is vulnerable to much more than accidents involving third parties.
Relying solely on general liability coverage puts your employees and your own company at risk. That's why we recommend that all commercial and residential policyholders have all the coverage they can afford. Thank you for explaining how general liability insurance covers any third party who is injured while on your property. I hope that all companies will receive this information because without it they could end up paying a lot of money out of pocket if someone gets hurt.