Business Insurance

Published on July 12, 2017

General Liability Insurance is Required

A few of the reasons we require all franchises to obtain business liability coverage are because you and your employees:

  • Visit a client’s place of work, or clients visit yours.
  • Have access to a client’s equipment.
  • May write or speak about a client’s business.
  • Use third-party locations for business related activities.
  • May be required to carry general liability insurance before entering into contracts.

 

For example, let’s say a child trips over a cord and is injured during a photo shoot on the client’s premises. Your business may be liable for this injury. Whether it is your fault or not, general liability coverage will protect your business against covered claims by paying defense costs and any damages up to your policy limit.

 Items to Consider When Purchasing General Liability Insurance:

A general liability insurance policy protects you, of course, but it may also protect other people involved with your business.  Most standard policies should cover the following situations.  Ask your insurance agent if your policy covers the following events:

  • If you have a joint venture or partnership, will all of your partners, members, and their spouses be protected if they are sued for something they do in an official capacity related to your business?
  • Will your employees be also protected from claims that result from actions they take in their capacity as employees?
  • If you have a written agreement to indemnify a person or organization, such as a vendor, will that person or organization would be protected against liability claims for property damage or bodily injury as a result of selling or distributing your products?
  • Will anyone legally associated with your business, including volunteers working under your direction, be covered for liabilities that result from the work they do for you, and for the use or maintenance of your property that is in their care?

Bodily Injury

It may be difficult to imagine how your business could cause serious harm or even death for another person; however, it’s good to know that your general liability insurance policy will pay if you are ever held responsible for someone else’s sickness or injury.  You will want the following to be covered:

  • Medical care costs
  • Loss of services
  • Court-awarded compensation for deaths that result from the injury

Property Damage

Even if you are careful and take precautions, it is still possible that something your business does (or doesn’t do) could damage another person’s property. It is also possible that your actions might prevent the property’s owner from being able to use it. In such cases, will your business liability insurance cover physical damage to the property and loss of use of the property?

 IMPORTANT:    If an employee sues you over an injury sustained while on the job, your business liability insurance policy will not cover the damages. You need a worker’s compensation policy for this type of coverage.

Legal Defense Expenses

Even if your company is not found liable for a claim, mounting a defense is expensive without insurance coverage. Will your business liability insurance policy pay for:

  • The cost to defend or investigate a suit or claim against you, including court costs, witness fees, attorney’s fees and police report costs?
  • Your reasonable expenses, such as the loss of your income for a day in court, if the insurance company asks you to assist in your defense against a claim?
  • The premium for the bond when a court requires you to post a bond to ensure you can pay a potential judgment in a liability suit?

Medical Payments

If a person is injured, either directly by you or at your place of business, your commercial liability insurance coverage should pay for funeral and medical expenses incurred within a year of the accident. For example, if one of your clients slips and falls at your office and requires medical treatment, your policy would cover the cost of that treatment. Of course, policy limits will apply.

Personal Injury

Personal injury is the part of the commercial general liability policy that protects you should someone claim that your business caused them damage that isn’t physical. In the following examples, most liability policies would protect you against any lawsuits related to:

  • Publishing, in writing or verbally, false information that libels or slanders an organization or person
  • Publishing material that violates a person’s privacy rights
  • Maliciously prosecuting someone

Advertising Injury

If you are sued over something that happens while advertising your company’s products or services, will your business liability insurance protection cover the claim?  Advertising injuries can arise from:

  • Publishing, verbally or in writing, false information that libels or slanders a person or organization
  • Publishing material that violates an individual’s privacy rights
  • Copying another company’s style of doing business, or advertising concepts
  • Infringing on another business’s title, copyright, or slogan

Sample Business Owners Declaration:

Sample Business Owners Declaration

Sample Business Owners Declaration p2