Overlooked Insurance Coverage
Michael Lesser, CRIS
PEOPLES INSURANCE GROUP, LLC
Most small business owners are aware of the basic types of insurance coverages they need for their business:
Property coverage for their building and business personal property
General liability coverage for bodily injury and property damage
Auto insurance for their vehicles
Workers compensation coverage should employees become injured on the job
However, both business owners and insurance agents often overlook three important coverages. My advice, if your agent does not ask you about these three exposures relative to your business, make sure you ask them.
1. EMPLOYMENT PRACTICES LIABILITY INSURANCE (EPLI)
Many business owners mistakenly assume their general liability policy provides coverage for EPLI claims. The number of lawsuits filed by employees against their employers has been rising in the last decade, even more so with the Me Too movement. While most suits are filed against large corporations, small companies are not immune to such lawsuits. Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP) or offer EPLI as a stand-alone policy. Many times, the most important part of this coverage is the “defense costs” that are included. While the accusation may be baseless, the legal bills are real.
EPLI provides protection against many kinds of employee lawsuits, including claims of:
Age, gender and race discrimination
Failure to employ or promote
2. NON-OWNED AUTO LIABILITY COVERAGE
If you think not owning company automobiles means you do not need auto coverage, you are wrong. If you, or any of your employees drive their own vehicles on company business, then you have an exposure for a non-owned auto loss.
In the event you or your employee is involved in a accident while using a personal automobile while conducting company business, there is a strong possibility that your business will be brought into the claim/lawsuit as well.
Non-owned auto liability coverage can help pay for legal expenses or judgments if your business is sued over a car accident you or your employees caused while driving a personal vehicle for business. Coverage extends for the company’s liability. While the driver’s auto policy is primary, the driver can still be held personally liable
for any damage or injuries they cause under their personal auto policy.
3. CONTRACTORS ERRORS & OMISSIONS (E&O)
Most of us are aware that lawyers, attorneys and physicians carry insurance to cover themselves in the event of a claim of malpractice. Contractors E&O coverage acts in the same way for an artisan contractor’s “work product.” Most general liability policies include an exclusion for “your work.” Coverage for this exposure is picked up by a Contractors E&O policy.
In the past, errors and omission coverage has not been widely available and affordable to small contractors. Now many carriers make quality protection available to small contractors such as plumbers, electricians, painters, finish carpenters, heating/ ventilation/air-conditioning professionals, select specialty trade contractors and others at affordable premiums.
One significant loss to a small contractor can have a devastating financial effect without this coverage.