There’s a lot of reassurance that comes from knowing your small business is insured. But it is important to understand your business’s risks and what the various forms of business insurance are designed to cover.
For instance, understanding what general insurance isn’t intended to cover is simply as important as understanding what it can cover. The ideal time and energy to find out what’s covered and what’s not is before you purchase a policy. As Insurance for crafters consider your policy purchase, determine what is excluded. As soon as you receive your general liability policy paperwork, it could be tempting to file it away and move on to the next challenge. But, before you let your guard down, take a little time to be sure that your policy covers all you think it does.
Keep in mind the next exclusions found in nearly all general liability insurance policies.
General Liability Excludes Professional Liability
General liability insurance may be the most common kind of business liability insurance. Basically, it is designed to protect your company in the event that someone alleges they were injured or their house was damaged because of your negligence.
A SMALL BUSINESS Owner’s Policy includes general liability insurance that covers bodily injury, property damage, accidental injury and advertising injury. This often includes advertising copyright infringement; defamation of character, such as libel and slander; and invasion of privacy. A BOP also includes property insurance that covers both your own and others’ business property.
What’s missing? Claims related to professional negligence or failure to perform your professional duties.
Lawsuits related to such claims have put many small companies out of business. In fact, for many professional services firms, the liability risk associated with professional errors & omissions and negligence could be far greater than the bodily injury and property damage risks included in a general liability policy.
To protect your business against such claims, you’ll need to purchase separate professional liability insurance, often known as errors and omissions or E&O coverage.
Unfair or Discriminatory Employment Practices Are Not Covered
An average commercial general liability insurance coverage also doesn’t cover unfair or discriminatory employment practices, including hiring and termination-related claims. Also excluded are any claims related to demotion, reassignment, employee evaluation, discipline, harassment, and other employment-related policies.
In short: if a worker alleges she or he was treated unfairly or that you acted illegally in your dealings using them, a general liability policy will usually not respond. These exclusions apply not merely for employees currently on staff, but additionally to job applicants, contractors, and former employees who no longer work for you.
If you’re concerned about claims related to employment-related practices, you might like to consider buying employment practices liability insurance (EPLI), which covers your legal liability for some claims linked to wrongful termination, discrimination or sexual harassment.
If your business is like many smaller businesses, you occasionally rely on subcontractors to get the work done. If so, it is critical to be clear about how your present liability insurance pertains to your subcontractors – or more importantly, how it might not.
With some insurance carriers, claims caused by independent contractors working on your behalf aren’t included in your general liability insurance coverage. On the other hand, some general liability plans are very broad and not just cover you, in case a contractor makes a mistake, but also cover the contractor directly. Obviously, is essential to know in advance how you should expect your policy to perform.