General Liability – What is General Liability, Who Needs It, What does it Cover?

A form of Insurance designed to protect Owners and Operators’ businesses from a wide variety of liability exposures.  These exposures could include liability arising out of accidents resulting from the premises or the operations of an insured, products sold by the insured, operations completed by the insured, and contractual liability.

General Liability insurance is the first major layer of protection for claims of bodily injury or property damage against your business.  General Liability covers you, but it also covers many others involved in your business, such as:

  • If you have a joint venture or partnership, all of your partners, members and their spouses are protected if they are sued for something they do in an official capacity related to your business
  • If your business is a corporation, your policy covers all of your business executive officers, stockholders and directors while they are acting in their official capacities
  • If you have subsidiaries, your policy liability coverage extends to any subsidiary where you own at least 50 percent of the stock
  • Your employees are also protected from claims that result from actions they take in their capacity as employees.
  • If you have a written agreement to indemnify a person or organization, such as a vendor, that person or organization would be protected against liability claims for property damage or bodily injury as a result of selling or distributing your products
  • Anyone legally associated with your business, including volunteers working under your direction, are covered for liabilities that result from the work they do for you, and for the use or maintenance of your property that is in their care

What GL Insurance Provides

  • Bodily Injury
    – Covers Medical Costs
    – Loss Of Services
    – Court Awarded Compensation for deaths that result form Injury.
  • Property Damage
    – Physical damage to the property or
    – Loss of use of the property

Coverages

General Aggregate – limit that will be paid during any one policy period.
Occurrence – limit for the sum of damages and medical expenses because of all bodily injury and property damages arising out of any one occurrence.
Products & Completed Operations Aggregate –  limit for damages because of bodily injury and property damage.
Personal & Advertising Injury – limit for the sum of all damages because of all  personal and advertising injury sustained by any one person or organization.
Damage to Rented Premises – limit for damages because of property damage to any one premises while rented to you, or in the case of fire, while rented to you or occupied by you with permission of the owner.
Medical Expenses – limit for all medical expenses because of bodily injury sustained by any one person.

Rating

There are four main ways to rate General Liability:

  • Trucker’s Payroll
  • Gross Receipts
  • Number of Units
  • Area (square feet)

Excess Liability

  • Insurance that is excess over any other insurance, whether it is primary, excess, contingent or on any other basis.
  • Fire, Extended Coverage, Builder’s Risk, Installation Risk or similar coverage for your work
  • Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner
  • Insurance purchased by you to cover your liability as a tenant for property damage to premises rented to you or temporarily occupied by you with   permission of the owner

When this insurance is excess, there will be no duty to defend the insured against any suit if any provider of other insurance has a duty to defend the insured against that suit. If no provider of other insurance defends, we will undertake to do so, but we will be entitled to the insured’s rights against all those providers of other insurance.

  • When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of:
  • The total amount that all such other insurance would pay for the loss in the absence of this insurance
  • The total of all deductible and self-insured amounts under all such other insurance.
  • We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision.

Truck Accident Claims Reporting and Handling

It seems that one of the more consistent areas of needed improvement for truckers, whether large fleet, small fleet or owner operators, is in the approach to claims reporting. This writer, who actively receives claims, has seen the gambit in claims reporting from well documented detail to virtually no information provided at all.

So what’s the big deal?  Why collect any information at all, especially if there will be a police report available anyway? The answer to these questions is not always obvious to the truck driver who is feeling threatened by the consequences, regardless of whether the accident was the driver’s fault.

Approximately 30% of truck accidents are never reported by truck drivers. Most of those “non-reports” are not-at-fault accidents and the drivers just “presume” the other party will take care of their own damages. Many, however, are the result of a driver either embarrassed about the incident or hopeful it will just disappear. Finally, quite a number of these non reported accidents are the result of the driver just not knowing what to do.

Accident reporting is simple. Just about every insurance company and/or agent provides an accident report form directly to the motor carrier or driver. That form is the basis for collecting information about the accident and all drivers should carry that form in their truck. It is the responsibility of fleet safety personnel to make sure the form is in all trucks and that drivers are continuously trained on how to complete it.

At the time of any collision, fire, theft, or other loss, the driver should take a deep breath and go into, what I call, “the data collection mode”. This should be a non-emotional, fact gathering, state of mind. There should be no admitting or blaming for wrong doing with other parties. The driver should immediately grab the accident report form and begin asking questions and documenting information.

The first, and most obvious, is to assess whether anyone is hurt including the other driver and anyone else involved. Assuming the other driver has not been hurt and can actively participate in obtaining details, he/she should get themselves, all other parties, and the vehicles out of harm’s way if at all possible.

Once safely out of danger, the driver should note the date, time, and specific location of the occurrence on the report form. Also write down the description of the other vehicles involved, license plate numbers, and note how many people were in other vehicles.  Again, document this information on the report form. Before the police arrive, the driver should courteously approach the other parties and invite them to assist by exchanging contact information including name, address, phone numbers, email addresses, and insurance information.   No discussion of who was at fault should occur as that only leads to everyone becoming defensive and uncooperative. If the driver has a camera, or phone equipped with one, it is advisable to take pictures of everything.

After exchanging information, the driver should clearly write out an honest description of what occurred along with a graphic diagram of the incident. Doing so will help everyone visually understand the nature of the verbal and written details. Once this has been completed, the fleet safety manager (if applicable), a representative from the insurance company, and/or the insurance agent should be contacted.

Generally, the biggest stumbling block we run into is with the driver not moving quickly to obtain the above information, and then when police arrive and separate the parties, it’s too late for the driver to obtain the much needed information.

Claims that are reported immediately and with complete information are almost always settled at a lower cost than those that are not reported quickly and with detail. All drivers should make sure they carry the claim report form in their vehicles at all times.    

“Bad Apple” Truck Insurance Brokers

Watch Out for unscrupulous insurance agents/brokers who falsely scare unsuspecting truck operators that their truck insurance is cancelled.   I learned of an incident where a trucker was called by one of these “bad apple agents” and told their insurance policy was not going to be renewed and was being cancelled.   The frightened trucker was smart enough to call his insurance broker to see what was happening and the current broker explained there were no problems.

Be careful who you buy your truck insurance from. There are a bunch of scam truck insurance agents who’ll do or say anything to mislead in order to make a sale.  Check out the agent before you buy insurance!