Welcome back from the short holiday break! We at MrInsurability.com all hope that you had a wonderful time with family and friends! But now, back to business and with that in mind, I’d like to look at the top 5 things that many business owners believe their general liability insurance covers and it doesn’t!
The first is damage to property. Contrary to popular belief, general liability only covers third-party property damage. In other words, if you or someone that works for your business damages another person’s property, it’s covered.
If a strong wind blows an empty milk crate (just an example) through the front window of your store, you’ll have to get your wallet out, because it’s not covered by general liability. Coverage for your personal business property (ie, the front window), is provided for by what’s called a Commercial Property Insurance policy. This coverage is how you get reimbursed for property damage for loss caused by things like fire, theft and even some weather related events.
Number two on our list is employee injury. Even today, there are a number of business owners who are not familiar with workers’ compensation insurance coverage. General liability definitely does not cover an employee injured on the job. You’ll need Workers’ Compensation Insurance to pay for his medical expenses, physical rehabilitation, lost wages and maybe more. General Liability Insurance can only cover accidental third-party bodily injuries, not an employee.
The third area is what we can call personnel issues. This most often comes up when an employee files a discrimination lawsuit. These typically claim wrongful termination and emotional distress. Again, general liability is of no use in a situation like this. You will need to have an Employment Practices Liability policy to get you through a situation like this.
Number four is vehicle insurance. Many business owners mistakenly believe that if your business owns a vehicle or vehicles and one of them is involved in an accident, all they have to do is file a claim on their general liability insurance. This is just not true and trying to sneak it in under your personal auto insurance is just a recipe for disaster. The only true answer is a Commercial Auto policy. It makes sleeping at night a whole lot easier!
The fifth and final misconception involves professional services. Anytime you offer a professional service, even simply advice or a recommendation and an error occurs, whether it was actually your fault or not, you are open to be sued for that mistake. The only coverage that can save you is a Professional Liability Errors and Omissions policy. It is the ONLY policy that covers a professional person when any type of mistake takes place as a result of that professional’s work.