| Safeguard Assets with Additional Liability Coverage |
| Written by Aaron Adam | |
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While most of us have heard of the more common forms of liability insurance such as commercial general liability insurance, errors and omissions coverage and directors and officers coverage, there are other types of liability coverage out there to handle more specific needs. While your commercial general policy can help protect you from a number of claims, there are a wide variety of claims that can be filed that you need to purchase additional coverage from your insurer to protect you against.
Litigation has been increasing over the past few decades and no end as in sight. As our society becomes more regulated and codified, more causes of action are created that plaintiffs can file under. Tort reform would limit the proliferation of lawsuits, but because Congress is largely comprised of attorneys, this type of change isn't likely in the near future. To protect hard-won assets of both businesses and their officers from being whittled away by defense costs and possible judgments and settlements, companies should assess their level of liability coverage to make sure that they're protected against all likely legal threats, and possibly some that aren't so likely as well. Liability insurance basically covers claims from a third party against a business that arise as a result of acts of omission or negligence. The standard commercial general liability policy covers claims of property damage or personal injury that arise from these acts, and other liability policies cover other types of damages and causes. Commercial general liability policies are often filled with exclusions that bar coverage for certain acts or circumstances, making it necessary for businesses whose operations may include those excluded acts or circumstances to purchase additional, or more specific coverage. Some of the more specialized forms of liability insurance include:Excess umbrella liability coverage: In an era, where multi-million dollar judgments have become commonplace, it may be a good idea to add an additional layer of coverage to your insurance policies coverage limit. An excess umbrella liability adds an additional limit of coverage to all your liability policies. For example, if you're sued and your insurance policy has a coverage limit of $2 million, and the court awards the plaintiff $3 million, you're left on the hook for the $1 million. That is, unless you have excess umbrella liability. If, in this example, you had excess umbrella liability coverage of $5 million, that $1 million over your commercial general liability policy's limit would be covered. The great thing about excess umbrella liability coverage is that it doesn't just cover one policy. If you have commercial general liability coverage, directors and officers coverage and product liability coverage, your excess umbrella liability coverage will apply to all three policies, unless barred by exclusions written into the policy. Foreign liability coverage: Many liability insurance policies only cover occurrences that happen within the United States. For companies with operations abroad, this decreases the effectiveness of this coverage. Fortunately, insurers sell foreign liability insurance, which in general will allow your other policies to apply to occurrences that happen abroad. This coverage is vital for any company that has operations abroad, including just business trips by company officials. Terrorism liability coverage: In the past, purchasing insurance coverage for terrorist acts may have seemed laughable, but after the tragic events of Sept. 11, 2001, an increasing number of businesses are interested in obtaining coverage for these types of acts. It can be a tough product for insurers to sell, because despite the low probability of these acts happening, the potential losses for an insurer who must pay out terror claims is very high. The federal government has taken steps to help insurers with these claims and to make terrorism coverage more available. Statistically, the odds of your business being impacted by a terrorist act are relatively low, but these odds are increasing as militant activity worldwide grows. Businesses that provide soft or likely targets for terrorist activity may want to consider this type of coverage. Sexual abuse liability: This type of coverage typically extends to non-profits who may have employees facing claims of sexual abuse from the populations they serve. This coverage is advisable for hospitals, schools, youth centers, shelters, rescue missions and other organizations that may be responsible for the care of others as sexual abuse claims can be quite expensive to defend and judgments in these cases tend to be high. Liability insurance exists to protect the hard-won assets of companies, non-profits and individuals from lawsuits. Understanding the risks of loss your organization may face is key to protecting its assets from being lost thanks to the inadvertent mistake of an employee or other mishap. |
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