Having your own business is as rewarding as it is risky. Protecting yourself and your employees from lawsuits nowadays is a must. This is when you would utilize a Commercial General Liability Policy (CGL). This will cover the expenses related to non-employee injuries that happen at your property or damage you cause to someone's property and any advertising mistakes. These are some of the most common lawsuits that can happen from everyday business. This can happen when renting a property, working with clients, and interacting with customers.
If your business is facing a lawsuit that is covered by your General Liability policy, the insurance will help pay for your legal expenses, including attorney's fees and settlements.
What does General Liability Insurance Cover?
General Liability Insurance is just one kind business liability insurance and perhaps the most important one. It takes care of third-party lawsuits, meaning lawsuits brought by anyone who isn’t employed by your business: vendors, customers, your landlord, etc.
But General Liability Insurance only covers certain third-party lawsuits, including those caused by:
Having General Liability Insurance is planning for the unexpected and protecting your assets, investments, life's work as well as your family’s future and financial security.
What doesn't General Liability Insurance Cover?
General Liability Insurance benefits can only pay for certain lawsuits. Here are some examples of what may not be covered and what type of policy would cover it, if any.
What is Workers Compensation?
Workers Compensation is a type of insurance that provides wage replacement and medical benefits to employees injured while at work. The premium is based on payroll and paid in quarterly payments. By having this coverage, the employee's right to sue for negligence is relinquished and therefore gives the policy holder peace of mind in case the worst should happen.
What is an Umbrella Policy (Excess Policy)?
An umbrella policy basically covers what your primary insurance does not. If your primary insurance doesn't have enough coverage to cover something, the umbrella policy will take up the slack. Think of it as an actual umbrella over your other insurances; if it rains you will not get wet. Umbrella policies can go over both personal and commercial policies. Underwriting may sometimes require you to have the maximum insurance coverages on your primary in order to be covered by an umbrella.
What are the most common requirements requested on a Commercial Policy?
WHAT IS A CERTIFICATE HOLDER, ADDITIONAL INSURED, WAIVER OF SUBROGATION, ETC.?
A certificate of insurance may be requested when obtaining a permit or bidding on a job. You may request these from us at any time at no charge. We will fax or email a copy to you and the person requesting the certificate (Certificate Holder). Simply call or email us with your name or company name and provide the name of the Certificate Holder that is to appear on the Certificate of Insurance, address and fax or email.
However, at times those Certificate Holders may have additional requirements that my lead to policy endorsements. An endorsement is an amendment or addition to an existing policy which changes the terms or scope of the original policy. These are sometime referred to as riders. The cost of these endorsements depends on the endorsement itself and the company you are insurance carrier. We will always provide you with a fee schedule at the time you choose to bind/renew your policy.
Types of Endorsements:
Additional Insured- a person or organization that enjoys the benefits of being insured under an insurance policy, in addition to whoever originally purchased the insurance policy. According to Wikipedia, the usual reasons for including other parties as additional insureds is due to the close relationship or legal requirements between the original named insured and the additional insured. In most cases it is beneficial for a party to be covered as an additional insured on the policies of other parties because this will reduce the loss history of the additional insured and lower its premiums. The losses will be posted against the policies of the party providing the additional insurance and their premiums will rise accordingly. Typically, a larger and more powerful business will require that smaller entities (desiring to do business) have the larger business named as an additional insured. They will be notified of intent to cancel or cancellation.
Waiver of Subrogation- prevents one party’s insurance carrier from pursuing a claim against the other contractual party in an attempt to recover money paid by the insurance company to its insured or to a third party in resolution of a covered claim. Usually in favor of the Certificate Holder.
Primary and Non-Contributory- only required from a person or entity already added as an additional insured to your policy. It is an endorsement that makes your policy the first to pay in the event of a claim and does not allow your policy to seek contribution from another policy. The reason your contractor requires that is because they do not want your insurance to seek contribution (shared expense) from their insurance policy after it pays a claim on their behalf.
Ongoing and Completed Operations- It is standard practice for an already listed additional insured contractors to require that coverage to extend to ongoing and completed operations. This practice protects the contractor and owners from losses that occur during the course of construction, as well as claims arising out of the completed project (damages found after the project is completed). Often times, damage resulting from a subcontractor's work isn't apparent for years after the work has been completed. When that claim occurs, a suit is often filed against both the general contractor and the subcontractor, and the general contractor will tender the defense back to their subcontractor. Thus, the reason for the requirement. They are “building walls of defense” to hurdle through before the claims actually need to payout through their own policy and be counted as a loss against them.
What about my Tools and Equipment?
This is perhaps the most commonly forgotten part of protecting your business. Many have the misunderstanding that Commercial Auto will cover items stolen from your work vehicles or General Liability will cover equipment stolen from the jobsite. Wrong! Tools and Equipment will only be covered on a Tool & Equipment Policy. Usually we will need the bulk value of all your hand tools and small equipment. Then separately we will need an itemized list of all tools or equipment valued over $500. On this list you will need the name, make, model, value and serial # for each item. We have some excellent prices to offer you!
Contact John Wycoff for a more definite explanation on what your requirements are and for help building the best policy suitable for your business needs! We look forward to hearing from you.
Please download the Forms Applications to the right and after you have completed the applications email them to us or fill out the quote form at the top of the page. Thanks!
Texas Commercial Liability Services
615 E Abram St Suite C
Arlington, TX 76010
Available 8:00am - 4:00pm M-F