Anyone can make an accusation, hire a lawyer, and seek damages. They can even take you to small claims court. The accusations can be totally unfounded and without merit, but you must defend yourself. This is one of the most important aspects of Liability Insurance. The insurance company will defend you and pay the costs of doing so. People will think twice before going to court against an insurance company.
If an insurance company pays a claim and they think they can blame you for it they will seek to recover their losses from you. This is a very common situation that many small contractors find themselves in. Liability insurance certainly takes most of the stress away. Insurance companies often settle these disputes without court action or lengthy delays. Fear of the unknown is often the most stressful part of any law suite. The longer it goes on the more affect it has on you and your business.
Things can happen at any job site.
You take off for coffee and leave a ladder leaning against the house. The two year from next door climbs up and falls off.
You are working on the roof of a home and drop a hammer. As it slides off the edge you hope no one is standing there.
A ramp you build breaks while the homeowner happens to taking a look around.
You are back filling a house and the skid steer slides into the basement.
You are soldering a joint on some old copper piping and don't notice you have started a fire until it is too late.
You leave a heater unattended and it starts a fire.
Things can happen on the way to the job site.
Perhaps you picked up some material for the job you are doing but you don't secure the load well enough and something falls off.
Perhaps you are driving your fork lift or some other equipment to the job site and get in an accident on the way.
You ask your employee to run to the store for something and he gets in an accident on the way there.
Even when your job is finished things can still go wrong latter.
Once you complete a job and leave, the work you completed could cause property damage or an injury to someone. It doesn't matter if it is the next day or two or three years down the road. It may be something as simple as that part time employee you hired to do some work for you didn't do nearly as good a job as you thought.
An employee may sue when injured at the job site.
Things can happen at any job site.
You take off for coffee and leave a ladder leaning against the house. The two year from next door climbs up and falls off.
You are working on the roof of a home and drop a hammer. As it slides off the edge you hope no one is standing there.
A ramp you build breaks while the homeowner happens to taking a look around.
You are back filling a house and the skid steer slides into the basement.
You are soldering a joint on some old copper piping and don't notice you have started a fire until it is too late.
You leave a heater unattended and it starts a fire.
Things can happen on the way to the job site.
Perhaps you picked up some material for the job you are doing but you don't secure the load well enough and something falls off.
Perhaps you are driving your fork lift or some other equipment to the job site and get in an accident on the way.
You ask your employee to run to the store for something and he gets in an accident on the way there.
Even when your job is finished things can still go wrong latter.
Once you complete a job and leave, the work you completed could cause property damage or an injury to someone. It doesn't matter if it is the next day or two or three years down the road. It may be something as simple as that part time employee you hired to do some work for you didn't do nearly as good a job as you thought.
An employee may sue when injured at the job site.
Please see the post on Workers Compensation and the small contractor for more details on when you could be sued by an employee. Many small contractors work for homeowners and farmers where no WComp exists leaving you vulnerable to an injured employee suing you.
You own or rent a building, office space, or storage facility.
If you rent a space and cause that area to be damaged you could be sued by the building owner or his insurance company. You forget about that tap you left running because you ran to answer to phone and an hour later you return to a flood. You crash into the overhead door. And so on.
That rent agreement you signed may have conditions in it that require you do maintain the premises but you don't do a good enough job.
People who visit you at your place of business could be injured on the slippery sidewalk, or an office chair breaks, or you allow them into to the workshop and they are injured.
Even when it is only 1% your fault you can still end up paying.
Any time a lawyer brings a law suite against someone they always name everyone that could be held responsible for the loss as defendants. The reason they do so is two fold. They don't want to sue one person at a time. Perhaps they win the law suite but the party they sued has no liability insurance and has no ability to pay. The remaining people who are at fault (even a little) can be required to pay 100% of the loss.
The Commercial Liability Policy for the Small Contractor
Some of these riders are not included in a typical liability policy and must be added to the policy. It is important to have an agent that knows which riders are important for your operation.
- Bodily Injury and Property Damage - forms that basis of what losses are being insured. A third party that suffers bodily injury or property damage who may seek damages from you.
- Premises Liaiblty - coverage for the area that you rent lease or own.
- Owners and Contractors Protective
Protects the Insured against liability for bodily injury or property damage arising out of work performed for the Insured by independent contractors.
- Personal Injury Covers liability arising out of occurrences such as libel, slander, false arrest, malicious prosecution, and wrongful entry.
- Blanket Contractual Covers liability for bodily injury or property damage as defined, arising out of written contracts or written agreements relating to the Insured's business or business premises and effective during the policy term.
- Broad Form Property DamageProvides a limited form of care, custody or control liability cover for property damageoccurring away from the Insured's premises (e.g. television repair performed away from the Insured's premises)
- Contingent Employers LiabilityProtects the Insured if a Workers' Compensation Board rules that an accident to an employee, who is covered by Workers' Compensation, is not covered under the provisions of the Workers' Compensation Act and legal action is taken against the Insured by the injured employee
- Employees as Additional Named Insureds - Coverage is extended to include the Insured's employees while acting within the scope of their normal duties
- Cross Liability Clause Coverage in connection with a suit brought against an insured by another party that has insured status under the same policy
- Extended Bodily Injury Insurance that extends the definition of bodily injury liability to include coverage for the use of reasonable force to protect persons or property.
- Incidental Medical Malpractice Covers the Insured for his legal liability for bodily injury arising from the rendering of emergency first aid treatment.
- Medical Payments Coverage is provided without regard to fault for medical expenses made necessary by any accident occurring on the insured premises or because of the Insured's operations.Medical expenses include first aid, necessary medical, surgical, x-ray and dental services as well as necessary ambulance, hospital, professional nursing and funeral expenses.
- Non Owned AutomobileCovers loss due to bodily injury or property damage, as defined, arising out of the use or operation of any automobile not owned by the Insured.
- Non Owned Watercraft (up to 8 meters)Covers loss due to bodily injury or property damage, as defined, arising out of the use or operation of any Watercraft not owned by the Insured.
- Occurrence Property DamageAll property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one accident
- Products and Completed Operationsa) Products LiabilityCovers liability for bodily injury or property damage, as defined, arising out of the Insured'sproducts, if the bodily injury or property damage occurs away from the Insured's premises after the insured has relinquished possession of the products. This does not cover damage to the product itself.b) Completed Operations LiabilityCovers liability for bodily injury or property damage arising out of work performed by or on behalf of the Insured away from his premises, if the bodily injury or property damage occurs after the work has been completed or abandoned. This does not cover damage to the work itself.
- Tenants Legal Liability Covers the Insured at the rented premises shown on the Declaration Page for his legal liability for any property damage to the insured premises as a result of an accidental cause. Coverage is NOT provided for damage for which the Insured has assumed liability under a contract or agreement (such as a lease agreement) unless the Insured would have been liable in the absence of subcontract or agreement. Coverage is limited to $100,000 (or whatever limit is listed on the policy). A $500 (or other amount) All Perils Deductible applies.
Deliberate Actions With a Known Outcome
Keep in mind that you can not deliberately and knowingly harm someone and expect the insurance company to come to your rescue. Libel, slander, and assault, are some examples. Anytime you do something with the intent to harm a third party it will result in denial of a claim by the insurance company.
Criminal Charges, Fines and Your Liability Coverage
Health and Safety rules have become a major concern for employers. Health and Safety has the power to levy fines and the Justice System has the power to lay criminal charges when they feel health and safety rules have been violated. If there is a serious accident on the job site an investigation will almost certainly be conducted. If you are fined your fine will not be paid by your insurance company. If you charged criminally you would not likely be represented by the insurance company in court. There are very few criminal charges laid in respect to workplace accidents but fines are starting to be assessed and can be quite high. Things are changing.
We know our business - but even more important - we know the small contractors business.
We can help. 306-821-1620
No comments:
Post a Comment