Your Business Insurance Minefield
This is the final article in our series about insurance
coverage. In the first article we discussed the general principles
of insurance coverage, and in the second article we described the
common features of a commercial general liability policy. However,
businesses are not protected with just a general liability policy.
Other types of insurance are necessary and should be discussed with
either your legal council or your insurance agent.
The most common type of insurance businesses purchase is
workers' compensation. In the early 1900's, various states decided
it would be beneficial for employees to have a scheduled set of
benefits, should they be injured on the job. The tradeoff was the
employee could no longer sue the employer in court, and workers'
compensation would function as "no fault". The employee can recover
for injuries according to a schedule of benefits, even if the
accident or injury was caused by the employee's own negligence.
General liability policies contain an "employee exclusion."
Therefore, coverage is found in a separate workers' compensation
policy, which is required because it covers damages set forth by
state statutes.
Another type of insurance typically purchased is to protect
directors and officers from losses from claims made against them in
their official capacity in a corporate, professional or charitable
organization. Sometimes, the liability coverage of a D&O policy
directly covers the directors and officers involved or in other
instances, it is provided through the corporation or organization,
which indemnifies its directors and officers.
For professionals, errors and omissions coverage (E&O) is
available. E&O coverage is sold to attorneys, doctors,
dentists, insurance agents, real estate agents, accountants, design
professionals, home inspectors, and other professionals. These
policies cover error in professional judgment that result in
economic losses.
Available to some businesses are policies that provide coverage
for employment-related claims. These can include employee
dismissal, discrimination, employee benefit errors, fiduciary
(401k) bonds and other employer/employee coverage.
Property coverage, as part of a business owner's package or as a
stand-alone policy, may also be purchased. This is to protect the
real or personal property they own, or to protect their landlord's
property. These policies contain provisions for loss of computer
data, loss of business income, reconstruction of records, valuable
papers and other sophisticated losses that you and your agent
should discuss.
One of the mistakes many business owners make is to assume that
a claim is not subject to coverage under any of the policies issued
to the business. Failure to submit a claim to your insurer, or at
least considering doing so, may result in not utilizing the
coverage you have purchased or a claim being denied because of late
notice. A careful analysis of the claim, all of its features, and
all of your policies should be made in order to protect your rights
as a business owner/operator to take advantage of coverages you
have purchased.
If you have any questions regarding insurance coverage, please
contact Scott Richardson at either sjr@jaburgwilk.com or
602-248-1012.
About the author: Scott Richardson is a seasoned litigator
who assists businesses with insurance coverage and works closely
with the pest control industry.