General Liability Exclusions That May Affect Your Biz

The general liability insurance policy for your small business will likely include bodily injury, property damage, personal injury, and advertising liability coverage.  Because these are liability coverages, the adjuster will investigate whether your actions resulted in resulted in damage to another party.  If so,

Work with your broker to understand your insurance contract

coverage will be afforded to the injured third party.  If not, defense will be afforded and coverage to the third party denied.  A small business insurance policy also may have medical payments coverage which pays for bodily injury that occurs regardless of fault.

With these broad categories of liability, many small business owners think that they are covered for ALL claims made against them.  However, there are some key items that are normally excluded. Fortunately, you can add these coverages back through an endorsement or a separate policy.

Liquor liability- small businesses only have coverage for host liability (i.e. you allow liquor to be consumed at your company picnic and damage occurs).  However, if a small business charges, is licensed to provide liquor, or in any other way is in the business of providing liquor, this risk of loss is excluded.  Many golf simulator businesses simply provide access to equipment but if your establishment is more akin to a Dave & Buster’s and serve liquor you need to be sure you have this coverage and just a simple general liability policy will not be enough.

Data Breach- it is 50/50 whether your policy will provide limited data breach or loss of data claims.  Many carriers are adding on a limited amount of coverage for loss of data which is caused by actual physical damage.  However, if you need larger cyber liability limits you need to issue a separate policy.

Work Product/Professional Services- errors and omissions claims and product recall claims are excluded but, as with the other exclusions, a separate policy can be purchased to obtain coverage for this risk of loss.  If your golf simulator business warrants that you can improve customer form or stroke, you may be going beyond the advertisement coverage and moving into errors & omissions policy coverage.  If you own your VR equipment or have agreed to indemnify the manufacturer and the product causes harm although your waiver/release forms will protect you, you may still need to have insurance beyond general liability coverage to defend against frivolous claims.