All small business owners need insurance, and most of them get their essential coverage through a business owners policy, also called a BOP. Within the BOP will likely come liability insurance, sometimes called commercial general liability policy. But, within the liability coverage itself, there are different options that apply to different scenarios where a claim might arise. What are these different coverage options? When can you file against them?
General liability policies can come to your aid in a variety of situations. However, whether you need to add extra coverage alongside this policy might depend on the coverage included within your initial coverage.
Commercial General Liability Insurance
A BOP is a way that allows small business owners to get numerous types of insurance within one policy. The convenience of the BOP is that it usually offers coverage limits tailored specifically to smaller enterprises, and each coverage option will work in tandem with one another. The BOP also adds the convenience of allowing the business owner to pay one premium for multiple types of protection.
General liability insurance is usually among the essential coverage within the BOP for the simple reason that it’s one of the most-important types of coverage a business owner needs.
Liability insurance applies to third party damage that you might cause through your services, or through mistakes made in the business. In other words, if you make a mistake (through action or inaction) that harms another party, like one of your customers, then this coverage can help protect them on your behalf. It will help the affected party move on with their life, while also protecting the business from having to pay out of pocket.
The Elements of BOP Liability Coverage
Within your general liability policy, you’ll probably find that your claims can apply to several different types of third-party losses.
Bodily Injury Coverage
This is one of the most-recognizable types of liability coverage. It is sometimes referred to as slip-and-fall liability coverage. Should someone get hurt in your business, then they might hold you responsible for their losses, and expect you to pay. For example, if someone slips in a puddle on your floor, and they get hurt, this coverage can pay them for the costs of their recovery, such as medical bills and lost income.
Furthermore, some liability policies include an element of coverage called accidental medical payments coverage. For example, suppose that someone falls in your business simply by a pure accident. This coverage can help you offer them assistance with their medical bills, even though you may have had no obligation to do so.
Property Damage Coverage
This coverage will apply when you accidentally cause property damage to third parties. If you are a carpet cleaner, and while cleaning someone’s floors, you accidentally burn the carpet, or worse, cause a house fire, this coverage can help you pay the affected party for the repairs.
Personal Injury Coverage
These types of injuries are those caused by allegations of libel, slander, defamation or copyright infringement against a third party. Suppose that a competitor accuses you of libeling them through a smear campaign. This coverage can help you settle with that party.
A key part of liability policies is that they often contain coverage for legal expenses. This means that coverage can help you receive the help of a lawyer. Since many liability claims lead to lawsuits by the affected parties, then you might need this coverage to apply to your court costs.
In some cases, your policy might offer additional coverage like cyber liability insurance or errors & omissions coverage. However, you usually will need to add these and other more-specific types of coverage to your business insurance portfolio. Sometimes, you might be able to add them to the BOP itself, while in other cases you will have to buy a separate policy.
The good thing is, in these cases, deductibles usually won’t apply to liability claims. Therefore, the insurer can settle up to the limits of the policy, as long as the policy covers the situation in question. Always talk to your insurer to determine whether you qualify to file a claim.