General liability insurance is a must-have for any business, as it will pay for expenses such as attorney fees, court costs, and judgements and damages you need to pay if your business is found at-fault during a lawsuit. Even though it is an indispensable coverage, it isn’t designed to protect you from all lawsuits or all risks.
All insurance policies, including general liability coverage, have exceptions and limitations you should understand. Here are five of the most common things your general liability insurance policy probably won’t cover.
Damage to Your Property
General liability insurance only covers third-party property damage. In other words, it protects you from the expenses involved when you or an employee damages someone else’s property. It may also cover you if you are held liable for damages to your landlord’s property.
However, damage caused by you or an employee to your property is not covered. You may be able to claim the damage under your commercial property insurance if it was caused by a covered event such as a fire.
Some commercial policies also cover weather-related events such as wind, so if a gust rips a sheet of plywood out of your hands and sends through the front window of your business, you may be able to file a claim.
Injuries to Employees
If an employee is hurt on the job, claims are covered under Workers’ Compensation insurance, not General Liability insurance. Workers’ Compensation insurance reviews the case and provides compensation if your employee is unable to work.
General liability insurance will protect you if you’re found legally liable for injuries to others besides your employees if these injuries are a result of your products, services, or operations.
General liability insurance doesn’t provide protection against claims made by employees alleging discrimination, wrongful termination, harassment and other employment-related issues. These lawsuits can be lengthy and costly, even if you win in court.
You need Employment Practices Liability insurance to protect you from the expenses involved in these lawsuits.
Business Vehicle Damage
Many companies are offering a delivery service during the pandemic, without considering the risk. Your General Liability insurance will not cover repairs if you or your employee gets into an accident while driving for business.
Errors & Omissions
Business lawsuits occur far too often and they can cost a bundle. For instance, a client may decide to sue if they believe that your error or omission led to financial loss and/or hardship.
Regrettably, General Liability insurance coverage isn’t designed to protect you from the consequences of your company’s errors or omissions. You need Professional Liability Insurance to protect you from the costs associated with these lawsuits.
Most business owners don’t understand the ins and outs of their insurance coverage. Luckily, insurance agents do.
Discuss your current coverage with an independent insurance agency like ours. We’ll help you close any gaps that could leave you very susceptible to unnecessary expenses and inconvenience. Contact us, today.