The risk of litigation is ever-present in the modern business world. Fortunately, the ubiquitous threat of lawsuits means that the need for protection has given rise to a sophisticated market for Commercial General Liability Insurance, which addresses this risk directly. If you are responsible for your company’s insurance, the challenge is to determine how much coverage you need.
The ultimate goal of insurance is to cover all of the risks to your business at an affordable price. The question of what to include in your liability insurance depends on a combination of the things that all commercial establishments need to cover and the risks unique to your business. While you know your business, you may not have the time or resources to make an accurate risk-analysis for it.
When Complaints Go to Court
Liability is a legal concept, and it is the civil courts that ultimately apportion accountability in disputes. Judges and juries hear arguments and point the finger of blame, one way or the other.
In awarding damages, courts order one party to pay compensation to another. Fighting such a lawsuit could bankrupt your business. Regardless of whether the alleged damage is real or not, the cost of defending your business and reputation can get expensive quickly if you are unprepared.
The Basics of General Liability Coverage
The risk is that if any person can make a credible claim against you, the court could order you to pay damages. If you can be shown to be responsible for causing the hazard, the injured party can sue you.
Any interaction with the public exposes your company and employees to the threat of demands for payment due to allegations of injury. If they were injured on your premises, by a piece of equipment you own, or an irresponsible act by one of your employees, the burden to make right the damages is on you.
General Liability coverage protects against some of the most common risk exposures. While the list of possible liabilities to cover is long and growing, at a minimum your policy should protect you from the following risks:
- Damage to third party property
- Third party injury
- Product liability
- Libel and slander
- Miscellaneous coverage
Damage to third parties property – If a customer or visitor to your property somehow suffers damage to some item of property, liability insurance will help you pay the cost of replacing it. If you have to replace a high-value item, such as cameras, computers, or specialized technical equipment, the damage could add up to a significant expense.
Third party injury – It is an unpleasant reality that a person could suffer a physical injury on your premises. With the cost of hospital care today, it does not take long to run up a considerable claim. Coverage against potential claims for medical expenses or lost income of a third party is essential for every business.
Product liability – If a customer purchases one of your products and they are injured or becomes sick because of it at a later date, you may face a liability claim. The offending product does not have to be something you manufactured. It can be an item that passed through your possession in distribution. If you manufacture, distribute or sell a product, you can be held responsible for the harm it eventually causes.
Libel and slander – Defamatory statements, either in print or spoken, can drag your company into deep trouble. Unfortunately, since perceptions matter, you can find yourself in court facing a defamation suit based on misunderstandings.
It is impossible to completely control how your people choose their words or the meaning that others take from them. In the age of Twitter Facebook and the many other viral channels, trouble is just one click away. Insurance against lawsuits for libel and slander are vital components of adequate coverage.
Miscellaneous Coverage and Changing Risk Exposure
There is a long list of other risks that merit the protections of General Liability insurance. These include such risks as might arise from breach of copyright, false arrest, and many others. Additionally, there could be risks that relate to the way that you conduct business, such as wrongful eviction or pollution liability.
The times are changing rapidly. Technological innovation and the shifts in culture that go with it can drag your business model along for the ride. Additionally, laws are changing at the local state and Federal levels continuously.
The right levels of General Liability insurance are crucial protection for your operation. In the past decade, the chances of being the target of litigation have gone up substantially. It could mean that your exposure has changed just as fast, or maybe it only requires a minor fine-tuning.
Risks Not Covered by General Liability Insurance
Commercial General Liability insurance covers the costs that arise from non-professional negligent acts on the premises that you occupy and by your employees. It does not include the following coverage:
- Professional mistakes and errors by your company
- Damage and loss of company property
- Injury to your employees
- Punitive damages
- Vehicular risk coverage
The cost of a claim and the legal expenses that arise from it could be devastating. Any of the exposures covered by General Liability insurance could lead to catastrophic payouts if you do not have the right policy in place.
If you need new or updated coverage in Baton Rouge, talk to the Commercial General Liability insurance experts at Henry Insurance. We can connect you to the right policy because we represent hundreds of insurance companies. We can help you determine what to include in your liability coverage.
Contact Henry Insurance to find the right commercial insurance policies for your company, including General Liability. Sit down with one of our insurance experts to make sure you don’t have too little coverage or too much.