BUSINESS LIABILITY INSURANCE

A commercial Umbrella Liability Policy, increasingly referred to as an excess policy, can provide an additional layer of business liability insurance protection to handle major losses. In past, only large business entities utilized this coverage, but today, different circumstances exists. Liability claims and court decisions involving millions of dollars are becoming increasingly common, and any business can be found legally responsible for this type of judgment.

The coverage form is still not standardized, varying greatly among companies and some jurisdictions may create unique coverage issues. Some examples include:

• Punitive damages: Some states only permit responsible parties to pay punitive damages; others allow insurers to pay.
• Policy exclusions: There are no standard umbrella liability policy forms, and each company has their own variation with every policy having exclusions. A business owner may consider an accident that does not involve a fatality to be one that can readily be handled by regular coverage. The reality is that such an accident may result in substantial medical care, lost income and other expenses.

Some other business liability insurance facts to consider:

• Can your business afford a payment that exceeds a million dollars? Today, because of safer vehicles, accidental deaths are less likely to occur, while severe head injury rates have increased. This kind of trauma can send the cost of a claim soaring, and it may take up to seven years to determine the ultimate extent of injury. Recovery is often slow and sporadic. These elements combine to make regular insurance coverage insufficient.
• A business may have auto liability coverage, but insurance limits of more than $500,000 are rare because insurers are reluctant to offer higher coverage at an affordable price. When the business auto policy is not enough to meet the amount of a loss, the business is responsible for the difference. The umbrella policy would take over where the business auto policy stopped, providing defense coverage and additional limits to pay large judgments.

In short, umbrella liability could be the difference between bankruptcy and an on-going business venture, shielding your business from catastrophic claims. Contact us to discuss this valuable form of liability coverage. It could help preserve your business.

Hiring and firing practices have become legal minefields, which spurred the development of Employment Practices Liability Insurance (EPLI). It’s important businesses have clear, consistent policies that directly relate to their job. Do you know what type of decisions could trigger a claim? For example, is it legal to terminate:

• A driver with a bad driving record?
• An employee who is rude to customers?
• A colleague who swears at others?

If you think the answer is a resounding “yes,” you may be walking into a legal minefield. Your actions should depend upon circumstances, like whether the employee's duties involve driving a company vehicle or interacting with customers. It’s important to determine if the company can prove that such behavior fails to meet the applicable job standards

Becoming well educated in employer practices is the first step:

• Seek legal counsel with expertise in this special area of the law.
• Document the essential job functions, establish measurable standards for each position and utilize regular performance reviews.
• Know the law in your state, then create policies that meet or exceed its legal standards.
• Read up. The U.S. Department of Labor offers a Small Business Handbook at http://www.dol.gov, and the U.S. Equal Employment Opportunity Commission offers numerous publications addressing employment laws at http://www.eeoc.gov.

he second step is exploring your EPLI options. While this type of liability insurance isn’t for everyone, we can help you determine if it’s right for your business. Policies and premiums for this type of coverage vary tremendously among insurers, and many insurers offer assistance in writing company policy manuals to reduce the potential for claims involving sexual harassment, wrongful termination or discrimination. No business is immune from these claims.

Doctors, lawyers and accountants, have long been held accountable for their decisions, and while these professions are still considered the “Big Three,” there are a growing number of other occupations that represent an exposure to liability loss that needs special protection, including pharmacists, architects, engineers, opticians, beauticians, insurance agents, consultants, and many others.

In most instances, a type of coverage called a commercial general liability policy will protect a business against the damage or injury their actions may cause to others. However, this type policy is designed to handle routine, fairly generic, and low-risk activities. Examples are customers who cut their hands on a sharp edge of an office's reception desk or a customer who is hurt when she collides with a clerk who is stocking a shelf. Much more is at stake with professional activities.