Commercial Liability Insurance is the protection of a business against liabilities arising out of its operations. While it is good to acquire such as insurance for your company, it is equally important to understand the exclusions – the things that are not covered under the same. This will help make the right choice and give clarity for the scope of the insurance.
Generally, the exclusions are risks caused due to pollution, professional services, employee, and employer disputes such as those under compensations or employment disputes, risks to the business due to war, liquor, directors, and officers liability.
Some insurers also do not consider defects in property construction due to poor workmanship as part of the commercial liability insurance. Employee injuries, damage to vehicles and risks against auto accidents are other aspect not covered. Intentional acts causing injury are also not covered, nor are any punitive damages incurred due to a lawsuit.
Click here to know what is covered under Commercial Liability Insurance
Case on Commercial Liability Exclusions
Mr. Batra runs a successful event management company and has bought a commercial liability insurance to protect his business. He had signed a contract recently that required his company to manage and organise all the functions of a wedding ceremony, the whole extravaganza lasting multiple days.
On the night of the themed party, his staff mistakenly covered the stage with blue flowers instead of the intended purple, spoiling the theme. The owner of the venue got into an intense argument and Mrs. Batra’s staff even physically assaulted the former. Mr. Batra found himself at the receiving end of the client who threatened to sue his company for wrong services and mishandling.
Mr. Batra approached his insurer for claiming damages to his company’s reputation and other losses due to the above.
However, these damages due to careless mistakes in delivering professional services as well as the intended act of violence are not covered under his commercial liability insurance scheme. He must bear the expenses or should have bought other insurance schemes to cover these.
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