Every business owner needs general liability insurance, but as new risks become more common, a typical policy may not provide enough coverage.Since any business owner can be held liable for mishaps that occur on their premises, business owners purchase commercial general liability (CGL) insurance to protect themselves against those risks. A typical CGL policy provides coverage for any bodily harm occurring at the business site or property damage stemming from a company’s operations or products, as well as personal injury coverage. The policy covers business owners, executive officers, joint venture partners, and employees alike. If a claim is made, the insured can receive payments to defray the costs of defending against lawsuits as well as any settlement or judgment.
Small business owners, in particular, need CGL insurance, since potential clients often demand such coverage before signing a contract. Depending upon a business’s potential liabilities, however, a standard CGL policy might be insufficient. Whenever possible, it’s best to complement the policy with other lines of coverage.
Parking Lot Insurance
In addition to CGL coverage, owners or operators of parking lots should consider purchasing garage liability insurance or gatekeepers liability coverage, especially if they provide valet services. These policies generally cover the loss of a vehicle parked within the garage or any damages to it. Gatekeepers insurance is typically added as an endorsement to a CGL or garage liability policy.
Gatekeepers insurance comes into play in a number of scenarios. If a car is stolen from a parking garage because an attendant left the keys in the car, the gatekeepers policy would provide a payout based on the deductible and the actual cash value of the auto at the time of the theft. The gatekeepers policy would also cover the theft of a car’s equipment even if the owner parked the car himself in a valet-serviced lot.
As data breaches become more common, business owners may wonder if their CGL policies insure against cyber attacks. A recent ruling from a Virginia federal appeals court supports that claim, holding that a data breach qualifies as a personal injury under a CGL policy’s personal injury provision. The case involved Travelers and its insured, Portal Healthcare Solutions.
In the lawsuit, Travelers maintained that it was not required under the terms of its CGL policy to defend Portal Healthcare for a data breach that leaked private health information on the Internet. Two earlier state court rulings had diverged from that determination and decided that traditional CGL policies did not provide coverage for cyber claims.
In light of the conflicting court decisions and growing cyber threats, Christine Marciano, President of Cyber Data Risk Managers, LLC, argues in a blog post that business owners cannot rely on a CGL policy to protect them in the event of a cyber attack. “It’s time to take a close look at your CGL insurance policy, especially at the time of your policy renewal,” she advises business owners. “Most certainly, when your CGL policy renews, you will have found your policy clearly excludes computer network security and data breaches.”
When working with business clients, insurance agents should keep that advice in mind. While a standard CGL policy serves as the foundation of their insurance plan, business owners may need additional insurance depending upon their specific business operations. It’s up to an insurance agent to investigate the activities involved in the business and recommend policies that provide comprehensive coverage.