American Eagle Insurance Blog
Coverage denials can turn out to be outrageous when you are with insurers who are unscrupulous. However, most of the time, all these incredible stories would turn out to belong to insurance policyholders who did not understand their policies much. The commercial general liability policy is among those that are very difficult to understand. Thus, you need to know some of the ground rules for interpreting the policy correctly as a matter of law.
The Date of Occurrence
General liability insurance considers an occurrence of an injury as its trigger. It covers the policyholder if the bodily injury or damage to property occurs during the policy period. This means that if you cancel your policy in December 2018 and an accident to a neighbor occurs in January 2019, there will be no coverage for the builder. Any damage or injury in a home after you have canceled the insurance policy is basically non-existent even if you still had that insurance during the whole time that you were building the property or business.
Exclusion for Punitive Damages
The General liability insurance policy does not pay for punitive damages. There are also some jurisdictions in some states that will not allow the payment of punitive damages by insurers. Thus, you have to be familiar with the public policy regarding punitive damages in your state. There are some jurisdictions though like Massachusetts where there is no definitive rule on whether the insurer should pay or not. In this case, the insurer may pay if there was no exclusionary wording in the policy.
“Your Work” Exclusion
When the damage to your property is done by "your work," the insurer means damage due to the choice of construction material. It should be damage based on the contractor's work. However, this damage must be natural damage from deterioration. If the damage is due to an accident caused by negligence such as a small electrical fire that destroys the property, then it is an exclusion from the coverage.
Exclusion for Products/Completed Operations
This means that negligence that causes accidents but is mistakenly attributed to products and completed operations are not included in the coverage. This means that if the janitor did not completely clean the flood of the kitchen, and a restaurant employee slipped, then the insurer for the janitorial service is not liable for this damage. The basis is the products/completed operations section in the policy.
Some Final Words
These are only a few of the situations where you might have a problem interpreting the general liability insurance policy. There could be more situations like this, and they may cause widespread understanding. The most important thing though is to keep asking your agent anything that you want to know. No one can explain the policy better than him.
At American Eagle Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (225) 667-7377 or Click Here to request a free quote.