Insurance coverage protects a business from unanticipated damage to products, assets, employees and lost profits. General liability coverage typically packages several different types of coverage into one total policy. The five basic aspects of a commercial insurance policy include fire, theft, auto, accident and liability. Individuals purchase these policies separately, but commercial policies package them under the heading of general liability.
As a business owner, you need to understand what incidents are covered in order to choose and use the best insurance package. Different policies exclude different things making it important for business owners to fully understand their coverage options and their policy limits. More coverage costs more in premiums, but insufficient coverage does not help much in the event of an incident. Make sure your policy covers all five areas to minimize your liability.
Determine the Areas of Coverage
General commercial liability policies typically include the five basic areas of coverage, but it is important to check for exclusions.
1. Fire - All insurance products may provide protection in the event of a fire, but check carefully to make sure you are in full compliance with your policy. A restaurant with an outdated fire suppression system may face coverage denials simply because they are in violation of the coverage agreement. Be sure your building meets all policy guidelines to avoid any issues in the event of a fire.
2. Automobile - Any time an employee drives from one location to another while on the clock, your business faces liability. If you do not have automobile coverage, you could face thousands of dollars in liability from just one accident. If an insurance company offers you a deal that looks too good to be true, take a look at the exclusions. Make sure both automobile and theft do not show up on the list.
3. Theft - Many insurance companies separate out their rider for theft coverage. When theft is excluded, a business can still write off product expenses on its annual tax return, but there is no way to claim the lost profits from the missed sale opportunity. An insurance policy makes up the difference, making a cash payment for lost products.
4. Accident - When an employee is injured on the job, the employer must take responsibility. Health care expenses alone may be enough to beggar you, so make sure you have insurance protecting your employees. Employer’s accident insurance covers medical expenses and salary for employees that can not work due to a work-related injury.
5. Liability - This type of insurance primarily protects your business from lawsuits. If a shopper takes a spill on store property, an insurance policy acts as the barrier in the event of a lawsuit. This is the area of insurance where you should be sure to have a high policy limit.
What are Policy Limits?
A policy limit does not refer to the types of incidents that are covered, but rather to the total amount the insurance policy will pay in the event of a claim. A small business carrying only $100,000 worth of products in-store does not need more than that in the way of replacement funds for losses to products. However, it is important to remember that the policy typically covers the entire contents of a location, including fixtures and capital assets like the heating and air conditioning unit. When determining the total policy limit for the contents of the building, get an estimate that includes both products and fixtures. Choose policy limits that accurately reflect the amount of a potential claim.
Get Total Coverage
Before buying an insurance package, a business owner must ensure that all areas are included, and that the liability limits are at least $1,000,000 per claim. It is unlikely that any claim will reach that amount, but given the high costs associated with medical care, lower policy limits could leave a business with a large bill after settlement.
Call one of our expert agents at 1-855-GO-GUARDIAN or visit the Guardian Insurance website to discuss the Atlanta general liability package that will give your business the best coverage.