General liability insurance (GLI) is also colloquially referred to as business liability insurance. GLI basically protects both you as well as your business from various claims of a “general” nature. Typically, claims involve property damage, bodily injuries, etc.
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In fact, in today’s increasingly uncertain business environment, just about everyone needs at least some form of general liability insurance coverage.
Some of the more common coverages include the following:
- Property damage liability
- Medical payments because of body injuries
- Product completion operations
- Personal as well as advertising injuries
- Damage to premises rented to(and by)you
- Commercial General Liability Insurance: A Breakdown
There exist many different types of policies covered by commercial general liability insurance in Kissimmee, FL. A typical coverage policy might include premises coverage (for instance). This will protect your business from multiple claims that might occur at your company’s physical location during your day to day business operations. Apart from that, it may also include different levels of coverage for both body injury as well as property damage that may be a direct result of any faults in your finished products.
- Example
ABC company produces car engines. However, during quality control, an engine bursts, setting the control chamber on fire. If ABC were to possess commercial general liability insurance in Kissimmee, FL, they will be fully covered and compensated for their losses.
Here, any sort of excess liability coverage may be purchased so as to cover any claims that exceed the overall limit of the GLI policy.
Before, signing on the dotted line, you should go through the contract quite thoroughly. Some commercial general liability policies might include exclusion clauses with regard to any specific actions that are not covered. For example, the policy may not include coverage regarding any costs associated or expenses incurred due to a defective product recall.
When purchasing any sort of general liability insurance in Kissimmee, FL, it is deemed pertinent to understand and differentiate between an ‘occurrence policy’ and a ‘claims-made policy.’
- Occurrence Policy
An occurrence policy generally provides coverage for injuries that might have been sustained during the active life of any specific insurance policy. This holds true even if the claim has been filed long after the policy has already been canceled. In such a scenario, ‘the occurrence’ may be defined as any event that can potentially result in the filing of any sort of insurance claim.
Basically, occurrence protection covers any incidents that were part of the policy and that had occurred while the insurance policy was in effect. And that also includes any policy or plan where the claim had been filed even after the holder of the policy had long since changed his insurance service provider.
- Example
Suppose Mr. John Smith works for Acme Enterprises. There is a gas explosion and Mr. Smith is exposed to hazardous chemicals. At that point in time, he is declared medically fit and there is no need to file any bodily injury claim. However, he starts experiencing the adverse health effects of the claims, later on, after the policy is no longer deemed active as per regular insurance policy standards. In such a situation, occurrence coverage will provide coverage to his employer Acme Enterprises, even if Mr. Smith is no longer working with the company anymore. Since the incident had occurred while the policy was in effect, his claim will be approved even if the files it ten years after the occurrence of this incident.
However, this policy does not give anyone an unlimited amount and time in terms of claims filed. There may be a cap placed by the insurance service provider. This cap will cover insurance claims up till one million dollars and for a maximum period of ten years after the date of occurrence.
- Claims-Made Policy
A ‘Claims-Made’ policy generally refers to any sort of insurance policy that actively provides coverage whenever a claim has been made against that specific policy. This is irrespective of the timeframe when the claim event had taken place. As a general rule, any claims-made policy is most likely to be bought, whenever the insured party thinks that there might be a considerable delay between the time when claims occur and whenever they are filed. Usually, general liability insurance in Kissimmee, FL, is often offered as either an occurrence policy or a claims-made policy. In a nutshell, the claims-made policy usually provides coverage for claims only when the event has been reported, while the occurrence policy generally provides coverage whenever the untoward event actually occurs.
Many insurance companies in the US also offer both claims-made and reported policies. However, the latter policies are widely considered to be less desirable than the standard claims-made policy. This is due to the fact that the claims must be reported during the policy or plan’s ‘active period’ for the claim to be processed and compensated. This also significantly reduces the total amount of time that the business might expect to be covered. In the case of an accidental explosion, the distinction might not matter. But it might become a problem in situations when many months or even years may pass between the event that acted as a causative factor of the claim and the time when the insured party actually filed the compensation claim.
- Key Differences Between Occurrence and Claims-Made Policies
The coverage for a claims-made policy will only be triggered by any sort of claim that might be filed ‘only’ when the policy is actually in force. That is, the insurance service provider is obligated to provide compensation to the policyholder by paying for all of their claims. Here, the insurance policy will always include a specified time clause in which the policy’s coverage will apply and the claims made during this specific period of time will be covered as per this policy. This type of ‘claim trigger’ is in stark contrast from an occurrence policy that will be based on the timeframe in which the claim event actually occurred. Here the compensation regimen of an occurrence policy will only be triggered by incidents that might fall under the specified time period. Since the occurrence policy is ‘claim specific’ rather than ‘incident specific’ it will come into effect if the injury or property damage it causes will occur only during the policy period covered by the policy.
- ‘Add-On Coverage’ on General Liability Insurance in Kissimmee, FL
In addition to the usual ‘run of the mill’ commercial general liability policies, commonly available today, many businesses in the US can also purchase policies that provide additional insurance coverage for a diverse array of business risks— especially those risks that are not covered in the original general liability insurance in Kissimmee, FL, policy.
For example, your business firm may also buy ‘wrongful employment practices’ liability coverage so that you will be well protected from a range of claims that are associated with different employment practices, such as lawsuits filed for sexual harassment, discrimination and wrongful termination. It is also possible to purchase different ‘add-ons’ in addition to the original policy by paying for insurance protection for inadvertent omissions, such as errors made while drafting and publishing financial reporting statements, along with any sort of extensive coverage for damages that might result from the harmful actions of the company’s directors and other senior officers.
- ‘Additional Insured’ Clause on a Standard Insurance Policy
Depending entirely on its extensive business needs, any company might need to name various other companies or important personnel as “additional insured” under their original general liability insurance in Kissimmee, FL, policy. This is fairly common when a business entity enters into a contract with another company. If they want to include their associate companies and people into the ambit of their original policy, then these people and entities will be known as “additional insured” parties.
- Example
XYZ Cleaning Services enters into a service contract with ABC Co. that stipulates that the former has to provide cleaning services to the latter.
Here, ABC Co. might require XYZ cleaners to add them as “additional insured” on their own policy. This way, if any employee steals from ABC or causes any damage, they will be insured and compensated by XYZ’s insurance service providers.
- Contractors and General Liability Insurance in Kissimmee, FL
If you are in the construction or contracting business, you will almost certainly require at least some form of general liability insurance. This applies even if you do not own any commercial buildings of the kind that are required by law to have property insurance. Or alternately, your outfit is too small to need payroll and other types of liability insurance. In any case, you will still stand exposed to different types of liability risks because of the nature of your work. In case you provide a defective part that causes an accident at a construction site, the resulting lawsuit may bankrupt you totally. Under the circumstances, it is only your general liability insurance policy that will protect you from total financial disaster or worse.
- Determining Your Individual Coverage Needs
The insurance coverage you need will almost certainly depend upon the nature and scope of your business as well as the ‘perceived risk’ associated with your line of work. For example, an oil refinery will definitely have a far greater need for fire insurance than a free-lance consultant or a web designer. Furthermore, your location also plays an important role. If you are in a high crime locality, then your insurance premiums may be higher than similar businesses in other areas. Similarly if you are sitting on top of a fault line, your earthquake insurance costs will be significantly higher than many other companies located in safer areas. If you fall under a low risk area, you will have to pay less premiums per annum and vice versa.
- How Does General Liability Insurance in Kissimmee, FL, Actually Work?
Your general liability policy contract will act as a guideline regarding the maximum amount of compensation that the insurance company will have to pay against any sort of liability claim that you might file.
- Example
Mr. Adam owns a small business making prosthetic limbs for amputees. Unfortunately, they cause infections amongst his patients and he gets sued for $300,000 along with $50,000 in legal fees. However, his general liability insurance in Kissimmee, FL, provides coverage of $250,000 only. Once his policy maxes out, he will have to pay the remaining amount. But if Mr. Smith had ‘umbrella insurance,’ it would be possible for him to increase his coverage limits. This is ideal for situations where standard insurance coverage may be inadequate for the expenses that Mr. Adam will have to face.
- Contractual Obligations
Many businesses stipulate insurance coverage without which they don’t sign a business contract. In other words, if you do not have adequate general liability insurance coverage, they will not be interested in doing business with you.
- Filing Insurance Claims
If an untoward event occurs and you have insurance coverage, then you may file a claim by informing your general liability insurance service provider as soon as possible. You should include all the relevant details of the incident such as the date, time, and the total number of witnesses along with other pertinent information.
- Conclusion
General liability insurance in Kissimmee, FL, is the only viable protection that you and your business may have against any dangers that you will have to face on a day to day basis. This is why acquiring such coverage as soon as possible should always be your top most priority.
Please call us at 407-344-1228, or email us at [email protected] for any insurance needs. Free Consultation.