The second part of our 3 Part Series on Building Insurance provides an overview of General Liability Insurance and what it covers in buildings.
General Liability provides coverage for Bodily Injury (injury to someone) and Property Damage (damage to someone’s property). Coverage usually includes Personal & Advertising Liability, which covers libel, slander, or defamation of character, and Products & Completed Operations, which covers a defective product or faulty workmanship. Contractors doing work in the building must have this last coverage. General Liability policies also include Fire Damage or Tenants Legal Liability. This coverage does not apply to a co-op or condominium, so it should not be taken into consideration when comparing quotes. It covers liability to others for damages resulting in the space you rent or lease. Medical Payments provides for medical expenses resulting from bodily injury on premises.
General Liability—Optional Coverages
One of the most confusing coverages is Hired/Non-Owned Auto Liability. It provides for lawsuits resulting from an injury or damage caused by an auto that the building does not own or one that they hired. An example of a non-owned auto would be the super getting into an accident while driving to the store to pick up supplies for the building. An example of a hired auto would be a contractor that the building hires gets into an accident. The coverage is usually inexpensive and is a requirement if the building has a Commercial Umbrella. Employee Benefits Liability covers lawsuits for negligent acts or omissions in regards to employee benefits such as health or dental insurance. Garage Keepers Legal Liability provides coverage for automobiles left in custody of the insured or their employees. If you have valet parking, this coverage is a must.
General Liability—Other Factors
Mold in a General Liability provides coverage for lawsuits resulting from a covered incident. Is coverage for Lead Paint important? In a rental building, it might be, but it might not necessarily be in a co-op or condominium.
Terrorism is not as much of a necessity in a General Liability policy as it is in a Property policy. The building would have to be sued because of a terrorist attack for coverage to apply.
Directors & Officers Liability provides coverage for the Board of Directors while acting in their capacity as board members. A comprehensive policy will provide coverage for lawsuits such as discrimination, wrongful termination, and non-monetary damage lawsuits. The policy should include coverage for the property management firm, as their contract indicates the building will be responsible for their legal fees in the event they are named in a lawsuit along with the board.
Stay tuned for Part 3 next week!
Content written by Edward J. Mackoul, President of Mackoul & Associates, Inc.