Know the Exclusions In Your Business Insurance Coverage

Insuring your business is one of the most important things you will do as a business owner.  The peace of mind which comes with having insurance in place to protect your business is very rewarding.  What’s just as important, is knowing that your insurance will do what you believe it will.

A term important for you to understand is exclusion.  Almost every insurance policy will have exclusions written into them.  For instance, most general liability polices for business exclude professional liability.

While the general liability policy is written to cover bodily injury, personal injury and property damage, as well as some types of advertising injury, something is missing.  It doesn’t cover claims against professional failure of performance or negligence of professional standard.

One lawsuit relating to professional liability can devastate a business.  Professional liability insurance or errors and omissions insurance is needed to protect against this exclusion of coverage.

Another exclusion generally found in a general liability policy is unfair or discriminatory employment practices.  This includes hiring and termination claims as well as disciplinary, job title and responsibility changes, and charges of harassment.  Again, separate employee practices insurance is needed.

Property insurance will also have exclusions written into them.  For instance, flood damages are generally excluded.  Other weather disasters such as wind may also be excluded and need separate policies written such as flood insurance.  Debris removal and business interruption insurance often aren’t covered.

Take a close look at your commercial business insurance and look for exclusions.  If you have any questions, talk to your licensed insurance professional.  Have them point out exclusions and coverage options available if needed for your business.  Then, you are able to really have peace of mind.

Intentional Act vs. Deliberate Act Exclusion

What is the intentional act exclusion?

 

Often I hear terms mentioned in my class regarding insurance coverage being excluded due to intentional acts.  For the most part, intentional acts within an insurance terminology and definitions has been changed to read “deliberate acts”.  This wording took much of the subjectivity out of the insurance policy, and was meant to define the true intention of insurance which was to cover weather related loss and accidental loss.

While raising my children, I always told them, for every action there is a consequence, and for every consequence, there is a responsibility.  It is no different in insurance.  However, there are difficulties in determining distinction between intentional and deliberate.  For example:  two small boys are learning to play catch in the front yard, and one overthrows the ball accidentally, and the other runs to catch the ball.  He does not see nor realizes he is about to trample the newly bloomed flowers of his neighbor. Is his action intentional?  Is it deliberate?  The consequence is the same.  So is he responsible and should the insurance policy pay for damages?  In this case, yes.  But the answer may not be the same for your situation.  Please call one of our agents to discuss some of the insurable risks your business may face.  We will be happy to find an insurance policy to protect you.

 

Commercial Insurance.Net, LLC Advisor is not an attorney, accountant or certified financial planner and makes no representations or warranties to that effect.  Always check with your chosen professional as to statements made in this blog for your particular situation.