General liability insurance in Hawaii helps business owners preserve their assets by covering damages, legal costs, and settlements up to the limit stated on the policy for covered claims. While business owners do their best to operate with the utmost care, accidents can happen that put them at risk for costly claims.
General liability insurance prevents business owners from paying these claims out of pocket, which could put the organization at financial risk.
What Does General Liability Insurance Cover?
General liability insurance is a common form of small business insurance that covers an organization for property damage and accidental injuries to others.
Some policies also cover other issues that may arise while doing business, such as copyright infringement, advertising injury, and reputational harm. Claims are often the result of a business’s products, services, or operations.
As every business is at risk for these types of claims, it is important for all small businesses to carry general liability insurance.
What Does General Liability Insurance Not Cover?
While general liability insurance does cover a wide range of common business risks, it will not protect an organization from every threat. Businesses must consider what unique risks they face and choose policies that cover these risks to prevent gaps in coverage.
Some of the most common types of claims not covered by general liability insurance include:
1. Commercial Auto Accidents
Businesses often rely on cars, trucks, vans, or other vehicles to transport or deliver goods. In the event of an accident, businesses require the proper coverage to ensure that damages or injuries sustained are covered.
Unfortunately, general liability insurance does not cover commercial auto accidents. Instead, organizations that use vehicles for business purposes require commercial auto insurance.
Commercial auto insurance is a type of policy that covers liability and physical damages for situations not covered by personal auto insurance.
Many types of vehicles are covered under commercial auto policies, such as food trucks, box trucks, service utility trucks, and work vans. Coverage is available for third parties who suffer injury or property damage and employees who operate the vehicle for business purposes.
2. Employee Illnesses and Injuries
There is always a risk that employees will become ill or injured on the job. From repetitive use injuries to slip and fall accidents, a serious incident could result in time off work and medical bills, which the business may be responsible for paying.
General liability insurance does not cover employee illnesses and injuries. Instead, businesses need to carry workers’ compensation insurance.
Workers compensation is a type of wage and medical benefits that provide employees who become ill or injured at work medical care, and cash benefits. Workers’ compensation coverage is mandated by each state.
3. Professional Mistakes
Despite a business’s best efforts to keep customers happy, mistakes may result in a lawsuit against the organization. General liability insurance does not cover professional errors, such as services that are not delivered, late, or inaccurate.
To protect a business against claims made in professional services, errors and omissions (E&O) insurance is required. Errors and omissions insurance provides coverage if a mistake is made during a business’s work.
Also referred to as professional liability insurance, E&O policies cover many mistakes, such as misrepresentation, negligence, inaccurate advice, and violation of good faith and fair dealing.
4. Damage or Theft to Business Property
Without proper coverage, a business would be responsible for replacing or repairing property that experienced theft or damage. Commercial property insurance is needed as general liability insurance does not cover theft or damage to a business’s property or equipment.
Commercial property insurance protects an organization’s physical assets from burst pipes, fires, explosions, theft, storms, vandalism, and more. However, some perils, such as floods and earthquakes, are not generally covered by commercial property insurance.
5. Intentional or Criminal Acts
General liability insurance does not cover intentional or criminal acts, even in cases where the policyholder is deemed legally responsible.
Deliberate wrongdoings or illegal acts performed by the business owner or an employee are also not covered by general liability insurance. For example, a general liability policy would not cover the cost of replacing a piece of machinery thrown out of frustration purposely.
Speak with Atlas About General Liability Coverage
While growing a business opens many incredible opportunities, small business owners also face serious risks. General liability insurance provides business owners comprehensive protection against a wide range of threats with premises and product liability coverage.
To learn more about what general liability insurance covers and does not cover or to request an insurance quote, reach out to Atlas Insurance Agency at (808) 400-6634.