General Commercial Liability & COIs
General Commercial Liability and Certificates of Insurance are very important to small businesses. It has been to ours. Understanding what they are and why you need them are an important step on your journey as a business owner. Please note we are not licensed insurance professionals but share this content as business owners and how we have been impacted by these insurance elements.
When we searched for space for our dog pool business years ago, the realtor we worked with told us to have an insurance agent lined up in case we found the ideal space right away. And, oddly, we did. The second space we looked at we saw our vision and the next step was to secure the space. Besides executing a lease and having an architect draw out the plans for the space, the landlord required a Certificate of Insurance, commonly referred to as a COI. This began our journey into the world of business insurance.
Slips and fall are common in life. It seems to be impacting us personally more as we age. Realizing that these also happen at workplaces is key to structuring insurance that will protect you and your firm. General Commercial Liability was required by our landlord at both the pool site years ago and the signing of the lease for our current space. Landlords require their business tenants to carry such insurance should an incident occur at the tenant site. If there is a claim or a lawsuit from such an incident, the landlord is likely one level away from being a party to the claim. Your insurance as a tenant provides them with this potential added layer of protection, in most cases.
Our amounts, both at the pool and here at the consulting office, were and are $1,000,000 per occurrence and $2,000,000 in aggregate. This means that an individual claim may be covered up to $1 000,000 and the total of all claims can go as high as $2,000,000. These amounts can be ‘assigned’ to others during particular jobs or to the landlord. This is accomplished through the COI. The Certificate will detail the amount of coverage and list the Certificate Holder, the party being assigned the insurance.’ Others may be added as Additional Insured in certain situations.
Do note that Insurance is state specific. So, whatever state you are located in you need to contact a Licensed Agent that will share the specific requirements to obtaining this insurance and the recommended amounts they will underwrite for your particular business. For those who are also licensed professionals who must carry Professional Liability insurance, make note this is not the same. You likely will need to carry both Professional and General Commercial Liability. It is important to understand the difference and the requirements when you open your business, not after.
Also, note that if you work from home you should still inquire with your insurance agent about general liability. If you visit a client or prospect and bring a bag of materials with you that an unsuspecting person walking by trips over, you might just be glad you spoke to your agent early on and set up this insurance to keep you protected.
Since we never know when our foot or paw may fall down the rabbit hole, do your business a favor and take the time now to understand General Commercial Liability Insurance. It has been our experience that it is reasonably priced and when we needed it, we were thrilled we had it.
Be well.
