Insurance 101
Why Disability Insurance is Key to Small Business Success
Make sure your small business is able to keep running should you or an employee get injured or sick.
Commercial General Liability Insurance, Explained: What Your Policy Covers
From property damage to advertising injury, here’s what you need to know about your General Liability insurance coverage.
- May 1, 2019
As a small business owner or sole proprietor, you know that having solid General Liability insurance coverage in place is a crucial step towards protecting your livelihood. But the details of just what’s included in your policy can sometimes be difficult to decipher.
First things first: a General Liability insurance policy is only as good as the underwriter, and the General Liability insurance policies arranged by Thimble are underwritten by Markel Insurance Company, part of the Fortune 500 and rated A-Excellent in the XV size category by A.M. Best. All of the General Liability policies arranged by Thimble are derived from Insurance Services Office’s (ISO’s) CG0001 base.
In an effort to make understanding your policy just as easy as purchasing it in the first place (what a concept!), we’ve created this guide to the three main types of liability covered under your insurance policy: bodily injury and property damage, personal and advertising injury, and medical payments. Leave your dictionary of obscure insurance terminology at the door—we’ve done the heavy lifting for you so you can focus on getting to work.
Bodily Injury and Property Damage Liability
Bodily injury refers to physical bodily harm, while property damage encompasses any harm to and/or loss of use of tangible property. General Liability insurance is designed to protect against liability for these types of incidents.
To illustrate, here are a few examples of claims that might arise in each scenario:
You are working at a client’s property and you leave your tool box on the floor. As they are leaving, the client trips over your tool box and injures themselves.
While doing some work at a client’s home, you move your ladder, which knocks over and breaks an expensive vase.
A client is discussing the details of a project in your office. When the client is leaving, he trips over your laptop bag. He falls and injures his knee, requiring hospitalization.
You are meeting in a client’s office. While walking towards them, you trip over a cord and knock over an expensive lamp. The client wants you to reimburse her for the cost of the lamp.
At a media event, an audience member trips over a microphone cord and injures himself. He decides to sue you for his injuries.
At an event that you are organizing and planning, you are setting up the flowers and knock over an expensive ceramic serving platter, breaking it.
You are using a leaf blower to clear a client’s backyard. While you gather the leaves into bags, you set the leaf blower down. As the client is leaving their home, they trip over the blower and blame you for the injury.
While mowing a client’s lawn, your mower throws a rock and shatters your client’s window.
You are mopping the kitchen floor in a client’s home. They enter the room and slip on the wet floor, blaming you for the back injury that results.
You are vacuuming a client’s dining room when the cord of the vacuum gets wrapped around an expensive dining chair, toppling the chair and snapping the oak frame. Your client asks you to replace the chair.
Your General Liability insurance policy applies to bodily injury and property damage caused by an occurrence that takes place in the coverage territory—the United States of America (including its territories and possessions), Puerto Rico, and Canada—as long as your ZIP code is active, and within the policy period.
The policy arranged by Thimble offers products and completed operations coverage beyond the policy period via an Exposure Period. Protection for covered claims arising from your performed work is provided as long as the occurrence takes place before the Exposure Period ends. The work must have been performed during the policy period for coverage to apply. The Exposure Period of one year from inception is provided at no additional premium.
Certain policy exemptions apply: for example, expected or intended injury from the standpoint of the insured. Refer to your policy for the full details of what’s included and excluded from your coverage.
Personal and Advertising Injury Liability
In contrast, personal and advertising injury does not refer to physical damage and is therefore less tangible in nature. Personal injury is a category of insurable offenses that produce harm other than bodily injury, including false arrest, detention, or imprisonment. Advertising injury includes offenses in connection with the insured’s advertising of its goods or services, such as libel, slander, invasion of privacy, and copyright infringement.
Personal and advertising injury is generally included under Coverage B of your General Liability insurance policy. In the broadest sense, this coverage is designed to protect the insured from lawsuits based on claims that may be farfetched or simply untrue. As is the case with bodily injury and property damage, certain exclusions apply—please refer to your policy for complete coverage details.
Here’s an example to illustrate this category of insurance claim: imagine that you are a salon owner, and you post a photo of a customer on your social media account to advertise a new treatment option without obtaining her permission to do so. She may then sue you for violating her privacy. This would be considered a personal and advertising injury claim.
Medical Payments
The third category of General Liability coverage falls under Category C of your policy: medical payments. The $5,000 included in your insurance policy covers immediate medical expenses for bodily injury to a third party. It is important to note that your policy still covers medical payments up to your policy limit ($1 or $2 million) for claims involving bodily injury, but the $5,000 is meant as a type of stopgap measure to cover expenses immediately after the occurrence.
To be eligible for coverage, the injury must have been caused by an accident on premises you own or rent or because of your operations. These expenses could include first aid administered at the time of the accident; necessary medical, surgical, x-ray, and dental services; and necessary ambulance, hospital, or professional nursing services. Note that this does not cover injury to your employees.
To illustrate the benefits of this coverage, let’s return to the example of the handyman whose client trips over his toolbox. Medical payments coverage would apply in this scenario if the client sustained an injury that required immediate medical treatment.
Who is Covered by Your General Liability Policy?
Now that you understand the ins and outs of your General Liability coverage, one important question remains: who, exactly, is covered by your policy?
You may want to add two types of people to your policy: Additional Insureds and crew members. An Additional Insured is a party added to a liability policy as an insured in regard to a specific job, activity, or location. This person or entity has a business relationship with the Named Insured, and extending coverage to them is a means of protecting their interest in the event that a covered claim or lawsuit is brought against them for injury or damage caused by your negligence.
By contrast, your crew includes anyone who is working with you on a job whose actions related to the covered activities you would like to be insured by your policy. The ability to add crew members to your policy is unique to Thimble, and is not a standard feature of ISO General Liability policies. Adding a crew member adds them as an insured so their actions are covered, whereas the actions of Additional Insureds are not generally covered.
We hope this guide helped you gain a better understanding of your General Liability insurance coverage! For more information about the terms of our coverage and how to navigate the policy purchasing process, check out our support page or download a sample policy.
Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.
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