General Liability Insurance Policy Comparison Tips for Technology Contractors
If you’re a technology business owner or an IT consultant and you’ve got a few quotes for General Liability Insurance in front of you but you’re not sure which policy to choose, you’ve found yourself in the right place.
Remember: premium is not the only thing to compare when looking at multiple Commercial General Liability quotes. Coverage varies from one policy to another, so it’s important to read the fine print to know what a policy really offers.
Sub-Limits in Your General Liability Insurance Policy
It’s pretty common for IT consultants to secure a General Liability Insurance policy because one of their clients demands it. And often, contract language dictates the broad limits of coverage (e.g., $2 million aggregate / $1 million occurrence). But most General Liability policies also have some sub-limits within the larger limits.
Common sub-limits in General Liability policies include…
- Products / completed operations.
- Medical expenses.
- Personal and advertising injury.
- Damage of premises rented to you.
While you may have a $1 million limit for any single claim, you may have a $10,000 limit on immediate medical expenses (which makes sense, because it can easily cost $6,000 to send someone to the ER in an ambulance).
Or you might have a $300,000 limit for damages on property rented to you (e.g., your office). So before you pay the premium on the lowest-cost policy, make sure its sub-limits offer adequate protection where you most need it.
Exclusions in Your Technology General Liability Insurance Policy
Ah, exclusions. The bane of the existence of many an insurance policyholder. In reality, though, exclusions aren’t so bad as long as you read through them before you buy a policy. Then you have a good idea of what’s not going to be covered (and enough time to choose a different policy, if necessary).
Common exclusions for technology General Liability Insurance policies might include…
- Data breach expenses.
- Injuries to you or your employees.
- Damage to your business property.
- Payment for lawsuits over professional performance.
These are all pretty standard for a General Liability policy – the insurance company isn’t trying to “get one past” you. The key is to understand how you can fill the gaps with other types of business insurance. For IT professionals, that may mean Errors & Omissions Insurance (for professional performance lawsuits and possibly data breaches) and Workers’ Compensation Insurance (for employee injuries).
Your insurance agent can help you sort out the details and recommend policies to make sure you have adequate risk management systems in place.
“Right to Defend” vs. “Right and Duty to Defend” Language
One major perk of a General Liability Insurance policy is that it can pay the costs associated with defending your business against certain types of lawsuits. But not all policies cover these costs in the same way.
Commercial General Liability policies where the carrier has the “right to defend” your business are not as strong as those in which the carrier has the “right and duty” to defend you. With “right and duty to defend” language in place, your insurance carrier can’t decide that it doesn’t want to defend your business after a lawsuit has been filed.
There’s More to a General Liability Policy than its Cost!
The most important thing to remember here is that there is more to a General Liability Insurance policy than the price you see on your quote. When in doubt, ask your agent to walk you through the coverage each one offers and have him or her help you choose a policy based on your business needs.