Hi, I’m Gordon Coyle and today we’re going to dive into a crucial aspect of general liability insurance that often goes unnoticed – general liability insurance exclusions and limitations. We’re going to explore how to understand these exclusions so they don’t leave your business vulnerable, so let’s get started.
First, I’d like to say that the core general liability insurance policy is somewhat standardized but there are huge variations of policy conditions, exclusions, and limitations that exist between different insurance companies and even each policy written by the same insurance company.
This means you’ve got to undertake the dreaded task of reading and understanding your specific policy.
1. Don’t let the fine print intimidate you.
Take the time to work with your insurance broker to fully understand what’s in the general liability policy and more importantly, what’s not in the policy.
2. Understand common policy exclusions
Most liability policies will contain standard exclusions that apply to all insureds, such as pollution exclusion, employee injuries, intentional acts, faulty workmanship, and so forth. Many of these exclusions make sense because the risks they exclude are better suited to be insured elsewhere, like on a workers’ compensation policy.
3. Understand industry-specific exclusions
For example in the construction industry, especially in New York, some GL policies exclude claims arising from action over lawsuits.
This is where an employee of a contractor is injured on the job site and sues a commercial property owner or general contractor for grave injuries but the property owner or GC hands the claim back to the employer or sub-contractor because there is an indemnity agreement or hold harmless in place.
If you’re a contractor or business with some form of contracting operations and you’ve got this action-over exclusion in your policy you better know about it because these claims are very expensive to defend against.
4. Seek out customization options
Some insurers offer the option to customize your general liability or business owner’s policies to tailor your liability protection to suit your company’s specific needs and may permit the alteration of certain exclusions or conditions.
In fact, outside of general liability, many business owners’ policies will allow the addition of other liability coverages such as employment practice liability insurance or cyber liability to their policy.
Often these endorsements are not as broad as a stand-alone policy, but when your budget is pressed, these options may be a good solution.
5. Once you’ve understood potential exclusions and coverage gaps now you’ve got to evaluate which ones you can afford to properly address.
This may include purchasing stand-alone or separate policies for risks and exposures you’re most concerned about.
The bottom line is that navigating the complexities of business insurance can be overwhelming, but you don’t need to go it alone.
Your insurance broker should be able to assist you in understanding your policy exclusions, limitations, and scope, and provide you with options and guidance on customizing your protection.
If your current broker relationship doesn’t give you the confidence to ask them to do this review with you, then maybe you’ve outgrown your broker and it’s time for a change.
Want to see how we dive into coverage reviews and make recommendations for our clients?
Why not give me a call or drop me an email? I’m here to help you understand your protection program and make the recommendations necessary without breaking the bank.
Knowledge is power when it comes to understanding exclusions and limitations in your general liability insurance.
By being proactive and seeking expert advice, you can shield your company from unexpected risks and claims.
Thank you and until next time stay protected and thrive in your business!
