What does general liability insurance protect against?

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Business liability insurance coverage is something most schools simply must have, so it is essential that you understand what it does and doesn’t cover.

What’s typically protected by commercial liability insurance coverage

Business is inherently risky, but business liability coverage safeguards against many known and unknown risks. Commercial liability insurance coverage protects you, your school and your employees from claims involving bodily injury or property damage, up to the limits of your policy.

Policies shield you from the expense of out-of-court settlements, litigation and judgments awarded by courts.

Lawsuits, investigations and settlements

If damages are filed against you or you’re sued, general liability insurance covers the insurance company’s investigation and attorney expenses, any judgment or settlement, medical expenses in case of injury and bonds if they must be subsequently posted.

Injury damages

Claims can arise from bodily injury or property damages resulting from accidents on your premises or from your products, your operations or advertising for your business.

What’s typically NOT protected by business liability coverage

Here are some situations that would not be protected by general liability insurance coverage.

Employee injuries.  Workers compensation is the insurance you would need to protect your employees when they are hurt on the job.

Professional mistakes. Business liability insurance coverage won’t cover a professional mistake, but professional liability will. It insures against mishaps that may occur as you offer your opinion, solution, service or recommendations in the course of business.

Auto-related coverage. Business liability coverage does not protect you against auto accidents. Purchase a separate auto policy to protect your business.

Punitive damages. Though there can be exceptions, a general business liability policy rarely pays for punitive damages resulting from a lawsuit.

Intentional acts. General business liability insurance does not cover damages or injuries resulting from expected or intentional acts. For example, if an employee assaults a customer, your business liability coverage would not cover the damages if they sue. But if the employee was defending himself or the company from a criminal act, the liability insurance would provide coverage.

Your work. Referred to as the “workmanship” exclusion, and is common in general liability policies. Insurance policies do not respond to what would normally be picked by a company’s warranty for their work.

Charter School News: Discrimination Lawsuit Filed Against Turkish-Run Charter School

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I just came across an article reporting a discrimination lawsuit filed against Truebright Science Academy Charter School in Philadelphia.  According to the report, 9 employees filed complaints with the Equal Employment Opportunity Commission in 2011 and were told in January they could proceed with the lawsuit. In the suit, they allege the school “engaged in […]

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Charter School News: High School, Official Had No Duty to Protect Bullied Students

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An important judgement was made last week that will potentially affect charter schools throughout the nation.   A Pennsylvania judge threw out a lawsuit against a school district and high school assistant principal accused of violating a student’s 14th Amendment rights because they were unwilling to guarantee their child’s safety against other students who were bullying her.

I don’t want to spend this post arguing over whether or not the decision and actions made by the school administrators was correct or incorrect.   I want to focus on the insurance implications of this lawsuit and how a proper insurance policy will actually absorb all of the defense costs associated with this type of lawsuit.

General liability insurance policies are designed to pay for claims arising from bodily injury and property damage for incidents where the policyholder is found negligent.   Additionally a general liability policy must also provide defense costs for any claim made against the policyholder unless the insurance company determines the claim is excluded on the policy.

So for a situation like this one where the school is being accused of negligence in regards to the student’s well-being, the general liability policy will defend the accused throughout the court case.

This one of the little-known factors of an insurance policy that becomes extremely important when litigation pops up.  Most liability insurance policies will provide some type of defense for the policyholder.  The amount of defense costs the insurance policy will provide depends upon the policy, but they will usually either provide unlimited defense costs or defense costs up to the liability limit within the policy.   When defense costs are insides the limit of liability of the policy, there is the risk that you could potentially use up your entire limit of insurance before the actual judgement amount is even paid.

If your charter school has additional questions on your general liability policy will respond to claims, please contact our office at (702) 507-6999.