What Isn't Covered by a Standard Business Insurance Policy?

By and large, if you’re operating your business on the up and up, your
standard business insurance
policy will cover many circumstances—from property damage to third-party
bodily injury. However, it’s always useful to be aware of what a standard
commercial policy does not cover so you can have realistic expectations in
case you need to file a claim in the future.

Intentional Acts

Whether it’s a lawsuit filed by a client alleging you deliberately misled
them or engaged in some other malfeasance, you’ll find yourself on your own
in these instances. After all, professional liability insurance is meant to
cover unintentional

forms of negligence

.

Similarly, if you or one of your employees intentionally damage someone’s
property, you’ll find your agent shrugging their shoulders when you file a
claim. By the way, inflicting damage upon your own property, whether
intentional or unintentional will also find you paying out of pocket. Long
story short: if it can be proven you’ve done something on purpose and any
type of injury or damage results, your insurance company won’t be held
responsible for covering you.

Engaging in Illegalities

No doubt you’re already aware of this, but it does bare repeating: engaging
in illegal acts will absolutely leave you without insurance coverage. Here,
it should be noted, illegal means more than just theft and the other acts
one tends to think of as being illegal. Acts that seem benign on the
surface, but are actually unethical, are also not covered. This can also
include slanderous advertising campaigns, spying on a competitor or hacking
their IT systems to gain a business advantage. Getting right down to it, if
an activity is against the law—you don’t have insurance for it.

Some Forms of Property Damage

If you buy a Business Owners Policy (BOP), you might assume all forms of
property damage are covered. But after an external flood or earthquake
strikes, you’ll be surprised to find standard policies do not include these
coverages. The key is to learn what constitutes a
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covered loss

(like a fire) versus what requires an extra rider or separate policy to
insure.

Labor Related Issues

Let’s say an employee asks a prospective hire one of the
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forbidden questions

during an interview. If they decide to sue, you’ll have a problem. Or,
let’s say you have a long-time employee who seems to be next in line for a
promotion. You give it to an outside hire who is much younger instead. If
the employee sues, you’re going to need
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Employment Practices Insurance

, as your standard business insurance policy doesn’t cover this either.

Bottom line, while your standard business insurance does provide coverage
for a wide variety of scenarios as long as you’re conducting business in an
ethical manner, there are circumstances under which you’ll need to add more
specific coverages. Find the coverage
you need at a price point that works for your business with CoverHound!