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Author:- David Mitchell MBA, MA.HR, SPHR, SHRM-SCP,
CIC (Certified Insurance Counselor)

This is an interesting and good question that was recently posed to me by a good friend of mine who is a small business owner. In my opinion this question can be summed up in one word and that word is “assumption”. Many businesses through out the years have found there is no insurance coverage at the time of a claim because of assumption.

OK so what do I mean when I say many businesses find no coverage at the time of a claim because of “assumption”. Far too often business owners assume because they have general liability, they have the coverage they have all the coverage they need should a third-party lawsuit develop. Sometimes the business owner buys off the internet assuming they can save a few dollars, and this is the only coverage they need for their business. Other times business owners with the best of intentions seek advise from insurance producers with no or little knowledge about the complexities of marketing and advising on business {commercial} insurance products.

A general liability policy covers bodily injury and property damage for premises and operations and products and completed operations up to the limits of the general liability policy. Of course, like all insurance policies a general liability is subject to limitation and exclusions.

Some common exclusions found in a general liability policy are contractual liability, breach of contract, failure of goods to perform as advertised, electronic chat rooms or bulletin boards, pollution, liquor liability, workers compensation, employer’s liability, aircraft, auto, watercraft, mobile equipment, property you own, rent, or occupy, damage to your product, damage to impaired property or property not physically injured, recall of products work or impaired property, electronic data, damage to your work, bodily injury arising out of personal and advertising injury.

The general liability will not pay bodily injury for any insured, hired person, workers compensation and similar laws, athletic events and products-completed operations hazards and war.

In addition, another huge exclusion often overlooked by insured in media and internet type business is “personal and adverting injury liability.” There is no coverage for personal and advertising injury liability for those engaged in advertising, broadcasting, publishing, or telecasting, designing or determining content of others or an internet search, access content or service provider.

As you can see there are many limitations and exclusion contained within a general liability policy. Without the advice of a skilled insurance insurance producer who has knowledge in business insurance it is easy for a business owner to not have the proper coverage when it needed the most at the time of a claim.

Another area of concern is having the proper limit. Business owners often “assume” they have a lot of coverage if they have a limit of 1-million-dollars. Today 1 million dollars coverage is not the same in our litigious society as a 1-million-dollar policy was ten years ago. Today an umbrella policy should always be considered by the business owner.

Liability policies that are often recommended in addition to general liability by skilled business insurance producers depending on the business needs may include the following; liquor liability, pollution liability, cyber liability, garage liability, garage keepers, employee benefits liability, non-owned auto and hired auto liability, employment practice liability, employers liability, an umbrella policy…”

The answer to the question is if you are a business owner do not assume you have the right coverage. Know you have the right coverage. Obtain enough information from a knowledgeable skilled insurance producer to make an informed decision. Do not wait until there is a claim to find out you “assumed” wrong about your business insurance coverage. At Ideal Insurance Agency we do not just give a price, but we also offer advice.