General Liability Doesn't Cover
1. Damage to your property
2. Employee Injuries
3. Employement Disputes
4. Damage to your vehicles
5. Professional Mistakes
1. Damage to Your Property
Imagine you own a bakery. While you’re working late to finish an order, a storm begins to brew outside. As you and your assistant hurry through final pastry preparations, high winds throw a piece of debris straight through the bakery's front window. Cakes on display are obliterated into a crumby mess and glass litters the floor.
Don't turn to your General Liability Insurance to cover the property damage. It only covers third-party property damage. In other words, it can cover the costs when you or your employees damage someone else's property.
To cover your personal business property (including the front window, baking equipment, and ingredients), you need Commercial Property Insurance. This policy can help repair or replace your property when it's damaged by fire, theft, and some weather-related events.
2. Employee Injuries
Your assistant baker prefers mixing batter by hand with a spoon instead of using the standing mixer. One day, his wrist seizes up in pain. Your assistant developed carpal tunnel syndrome, a repetitive motion injury. Does General Liability cover it?
Nope, you'll need Workers' Compensation Insurance to pay for his medical expenses, physical therapy, and some lost wages. General Liability Insurance can only cover non-employee bodily injuries.
Though your policy doesn't cover your employee's injury, it usually covers the injuries they cause.
3. Employment Disputes
With your top assistant baker out of commission, you need your other employees to share the workload. One cake decorator starts coming in late or missing shifts with no explanation. You talk to her about the tardiness and no-shows and dock her pay for the unworked shifts. In response, she quits.
A few weeks later, your former cake decorator sues you over discrimination. She says you wrongfully disciplined her and caused her emotional distress. Empolyment Practices Liability can help cover your small business here, but General Liability won't cut it.
4. Damage to Your Vehicles
Business is good for your little bakery, so you purchase a vehicle to make deliveries. If your new delivery van gets into an accident, will your General Liability Insurance cover the cost of repairs?
Nope.
And you can't rely on your personal auto insurance either. It typically doesn't cover business driving. Long story short, it’s time to invest in Commercial Auto Insurance.
5. Professional Mistakes
You make a beautiful wedding cake, but once it's delivered to the wedding reception, you receive an angry phone call from the bride’s father. The cake is all wrong. The couple originally ordered a three-tiered chocolate cake. You made them a two-tiered yellow cake. With a little digging, you realize you got two different orders mixed up. The couple threatens to sue your bakery for the mistake and for ruining their reception.
In this scenario, only Professional Liability Insurance can cover lawsuits over professional mistakes. For more on the difference between these two policies, read, “General Liability Insurance VS Professional Liability Insurance.”