What is general liability insurance?
Whether you are a small business owner or multinational corporation, when it comes to your insurance coverage general liability will always be at the top of the list. Your general liability coverage protects you (the owner) and your employees if you are involved in a lawsuit. From someone slipping and falling in your parking lot to injuries resulting from using your product, your general liability policy covers expenses related to out-of-court settlements, litigation, and court judgements. Your policy may also include advertising injury, bodily injury, personal injury, and property damage. There are many additional coverages that can be added on to the policy depending on the insurance provider. Some of the coverages might be additional insured, primary and noncontributory, waiver of subrogation, professional, and pollution (to name a few). Understandably, all that can be a lot to take in at once so let’s break down those additional coverages.
In most if not all cases when dealing with a contract between you and your customer you are required to provide the additional insured endorsement on your policy. What does that mean? Additional Insured simply means a person or organization that enjoys the benefits of being insured under an insurance policy, in addition to whoever originally purchased the insurance policy. This allows the additional insured the right to go straight to your insurance provider if needed. This endorsement is typically offered for an additional fee on the policy and can be purchased on an each additional insured option or if you need blanket additional insured coverage that allows you unlimited additional insureds during your policy period.
Primary and Noncontributory
The primary and noncontributory endorsement can be a little trickier when calling up your agent and requesting it be added. What does primary and noncontributory mean? The terms primary and non-contributory most often appear in business contracts that involve liability insurance. Primary insurance appears more than non-contributory, because the latter has no set definition. Primary insurance refers to situations with multiple insurance policies where one will step in before the others. Example: In liability insurance claims, when two policies cover the same loss, one usually applies on a primary basis and the other on an excess basis. This means that one will pay first (the primary policy), and the other will pay only if the primary policy either does not cover the loss at all or if the amount of insurance is not enough to pay for the entire loss. For example, if the primary policy has a limit of $1,000,000 each occurrence and the amount of the loss is $1,500,000, the primary will pay its limit of $1,000,000 and the other policy, which applies on an excess basis, pays the remaining $500,000.
Waiver of Subrogation
In recent years waiver of subrogation has been being requested more and more. What is waiver of subrogation? A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss. This endorsement is much like the additional insured endorsement in that it can be purchased on a case by case basis or in blanket form as well.
When working with clients in industries that the insured’s professional opinion or services can result in financial loss, illness, injury, or death, professional coverage is always a must. This coverage can often times be added to the general liability policy for coverage. What is Professional Liability Insurance coverage? It is insurance that protects professionals such as accountants, lawyers and physicians against negligence and other claims initiated by their clients.
You may ask yourself why would the average client ever need pollution insurance coverage and what does it do? Pollution insurance is a type of insurance that covers costs related to pollution. This can include the costs of brownfield restoration and cleanup, liability for injuries and deaths caused by pollution. This could occur while transporting fuel to the job site and being involved in an accident for example. For those working in areas where this is a possibility – pollution coverage is important.
General liability insurance is a staple of coverage for most business owners. CEO’s, CFO’s, human resources, and business owners understand the importance of making sure their liability insurance is written properly and that they carry the additional coverages needed to protect their assets. Business owners today are faced with many challenges from taxes, insurance, managing employees, cash flow, and the list goes on and on. General liability insurance is there to protect you from past, present, and future issues that could cripple or destroy your company without it. So the next time your agent would like to sit down and review your coverage get it done!