Every day business owners face a number of liabilities, many of which can be insured with that well known Commercial General Liability (CGL) insurance policy. But where are the 'gaps' and why are they there? Can you do anything about them?
Coverage limitations appear in a number of places; exclusions and definitions being the main areas. You can group all these limitations into three main categories:
(a) those that can be covered by endorsement to your policy (and may add premium);
(b) those that can be insured but require a separate policy; and
(c) those that are simply uninsurable.
Let's look at some examples:
Examples of coverage typically added by endorsement:
(i) If you have property of someone else in your care that gets damaged your CGL would exclude that as Third Party Property Damage. A Broad Form Property Damage endorsement removes of what would otherwise have been excluded.
(ii) The definition of Coverage Territory is commonly Canada and United States, requiring legal action against you to be taken there. You can expand that by endorsement.
Examples of coverage typically requiring a separate policy:
(i) Profession liability insurance is covered under a specialized policy.
(ii) Pollution liability can also be put in place using a specific policy.
Examples of risks which are typically uninsurable:
(i) Bodily Injury that is expected or intended would obviously be uninsurable.
(ii) Liability arising from a property you abandon cannot be insured.
Being aware of coverage 'gaps' is an important step towards securing the insurance you want and need.
Once you know what coverage isn't there, and why, you can make an informed decision regarding what you are willing to assume as a cost of doing business, or what you want to add to your insurance.
If you have any questions or concerns you shouldn't hesitate to contact your Staebler broker.