As a responsible business owner, you’ve taken the steps to protect your business through general liability insurance. What you may not know is that your policy doesn’t protect you completely from liability.
General liability only provides protection against third-party lawsuits.
If you don’t purchase additional insurance, you may be leaving your business vulnerable to lawsuits.
Here are five key things that your general liability insurance policy won’t cover.
1. Professional Snafus
Mistakes happen in the business world, even when you try your hardest to cover all of your bases. Unfortunately, your general liability policy doesn’t cover these mistakes, which can leave your business vulnerable to lawsuits.
Let’s say a professional client places an order with your company. You prepare the order and ship it out as quickly as possible. After receiving the shipment, the client calls threatening to sue your company because the item wasn’t what the company wanted. As it turns out, you mixed up the client’s order with another client’s order.
In this case, you would need separate coverage for professional liability in order to be protected.
Professional liability insurance is a must-have for most businesses.
2. Employee Injuries
Employee injuries can and do happen – even in office settings. But your general liability insurance policy won’t cover the worker’s injuries.
General liability only covers non-employee injuries. It also covers any injuries that your employees cause to others.
To protect your business, you will need workers’ compensation insurance. This policy will provide coverage for physical therapy, medical expenses and some of the employee’s lost wages.
3. Damage to Company Vehicles
Business is going well, so you invest in a small fleet of company vehicles. While driving in bad weather, one of your employees gets into an accident.
Will your general liability policy cover the cost of repairs? No. What about your personal auto insurance policy? Nope.
Personal car insurance policies typically do not cover vehicles owned by businesses.
Damage to company vehicles is only protected under a commercial auto insurance policy. And just like with your personal car insurance policy, you want to make sure that you get more than the minimum coverage on your commercial auto insurance policy.
Going above the minimum will reduce the risk that you’ll have to pay for damages out of pocket.
4. Damage to Your Property
Damage to third-party property is covered under your general liability policy, but not damage to your own property – even if the damage is caused by a natural disaster.
Your general liability policy will protect your business if an employee damages someone else’s property, but if your office or shop is damaged in a storm or during a robbery, you’re on your own.
To cover your company’s property, you’ll need to purchase commercial property insurance. Commercial property insurance will cover damages caused by theft, fire and weather-related incidents.
Policies are available with a wide range of coverage limits, so you’ll need to consider the true value of your property before purchasing coverage.
Losses caused by malpractice are not covered under general liability insurance. If you run a business in an industry where malpractice is an issue (such as the medical or legal field), you will need to purchase separate malpractice insurance.
Keep in mind that malpractice insurance is sometimes not enough to cover personal assets. An umbrella insurance policy may be required to protect your own personal assets.
General liability insurance provides key protection for businesses, but it’s important to remember that it doesn’t cover everything. Consider sitting down and talking with a professional to determine what types of coverage your business needs for full protection.