General Liability and
Property Package coverage is the most basic type of commercial insurance and is limited to liability claims of bodily injury
or property damage. Coverage is provided for accidents on your premises or at your customer's location. Some client contracts
also refer to these policies as Comprehensive Commercial Liability. It is important to remember that these policies exclude
errors and omissions type claims related to the delivery of your professional services.
What
General Liability Protection Can Provide
Bodily Injury
Of course, no small business owners like to think that something their company
does or doesn't do could injure, even kill someone else. But it's comforting to know that if you are ever held legally
responsible for such an injury, sickness or disease, General Liability coverage will pay the affected person or organization
for:
The
cost of care;
- The loss of services; and
- Restitution for any death that results from
the injury.
Property Damage
Regardless of
how careful you are, you may find yourself in a situation where something your business does or doesn't do damages someone
else's property. Even if you don't physically injure that property, you may do something that actually prevents its
owner from continuing to use it. If so, you'll rest easier knowing that General Liability coverage will compensate the
property's owner for either:
Products-Completed
Operations
General
Liability typically includes liability protection for your company's completed products or services. This means that,
if an injury ever resulted from something your company made or some service your company provided, your policy would pay for
the resulting damages and any legal expenses (up to your policy's limit). And if you were sued because of these damages,
your policy would cover related defense costs regardless of who was at fault -- in addition to your policy's limit.
Contractual
Liability
General
Liability coverage extends to any liability you may assume by entering into a variety of different types of contracts, including:
A building lease;
Any easement of license
agreement;
An agreement to indemnify a town or city if required by ordinance;
An elevator maintenance agreement.
Liquor
Liability
As
long as you're not in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages,
the General Liability policy will protect you in case someone claims you are legally liable for a liquor-related accident.
This means that, as long as you don't charge for the alcohol, you would be covered if you occasionally distribute alcoholic
beverages -- such as at any annual company picnic or a holiday office party.
Employee
Injuries
If
one of your employees ever sues you for an injury you supposedly caused, your General Liability policy would not cover any
damages. Rather, this type of protection would be provided by your Workers' Compensation policy.
Fire,
Lightning or Explosion Damage
Whether you rent or own your business property, you'll find it reassuring that the insurance plan for small businesses
includes coverage for damage to property of others resulting from fire, lightning or explosion damage caused by you. Better
yet, this coverage applies to other parts of the building you occupy that may be damaged due to your negligence. For example,
if you rent the second floor of a building, and through your negligence cause fire damage to the first floor, your liability
policy will also cover the damage you've caused to your neighbor's office space.
Hired
Auto & Non-Owned Auto
Hired Auto & Non-Owned Auto coverage is typically added as an endorsement on a General Liability policy. When
there are no vehicles titled in the company name this coverage will meet the contract requirement for Commercial Auto coverage.
Hired Auto coverage replaces or augments
the liability coverage offered by auto rental agencies. However, the vehicle must be rented in your company's name and
this does not replace the physical damage coverage that applies to any damage you cause to the vehicle you are renting. You
should still obtain physical damage coverage from the rental agency.
Non-Owned Auto coverage protects your company in the event that your company is sued as a result of an auto
accident that you or one of your employees has in a personal vehicle while on company business. This coverage will not protect
you or your employee personally, only your personal auto policy will do that.
Legal
Defense Costs
Even if your company is not legally responsible for some claim someone makes against you, it can be quite expensive
to defend yourself against such claims. Fortunately, your liability policy will typically pay for:
Any defense costs incurred
directly by the insurance company, including attorney's fees, witness fees, and police reports;
Any court costs or related
costs you're charged in connection with a legal suit;
Reasonable expenses you incur at the insurance company's
request to assist in your defense (such as loss of earnings if you have to testify in court). Your liability policy will also
pay the premium for any bond the court requires, making sure judgment will be paid if you are found legally liable for some
injury or damage.
Medical
Payments
If
someone is accidentally injured either by you or at your business site, General Liability coverage will pay for medical and
funeral expenses incurred within one year of the accident (up to your policy's liability insurance limit). For example,
if a customer slipped and fell on your premises and had to undergo medical treatments.
Personal
Injury
Something your business either does --
or fails to do -- may not physically harm a person, but it may personally injure them. If so, you'd want to know that
your liability coverage would protect you from any lawsuits arising from such an injury. Most General Liability policies provide
coverage if you are accused of:
publishing (either verbally or in writing) inaccurate information that slanders or libels a person or organization;
publishing
material that violates a person's right of privacy;
falsely arresting, detaining or imprisoning someone;
maliciously prosecuting
someone;
wrongfully evicting someone.
Advertising
Injury
If you are ever sued because of something that happened during the course of advertising your company's own goods,
products or services, this policy will provide valuable liability protection. Such advertising injuries may result from: ·
publishing (either verbally
or in writing) inaccurate information that slanders or libels a person or organization;
publishing material that violates a person's
right of privacy;
copying some other company's advertising ideas or style of doing business;
infringing on another company's copyright,
title or slogan.
Commercial
Insurance for Your Business - BOP
Why
wouldn't every company choose General Liability and property package policy for their business insurance, with all the
advantages listed above? First, not every business is eligible for BOP coverage. If a company is involved in high-risk or
highly-specialized operations, if it occupies large premises or conducts most of its services off-premises, or if requires
higher limits of liabilities than BOP packages offer, the company will have to find other forms of commercial insurance.
Second, General Liability and property package
policies carry a single limit for bodily injury and property damage claims. For the right kind of business, the single limit
in the BOP is a simple, adequate feature. But if your business has higher than average product liability risk, the fixed limits
of a BOP may not be sufficient
