How to Know You Need Coverage Beyond Premises Liability

By Shawn Woedl



Premises liability is the legal principle that property owners have some level of accountability for accidents and injuries on their property, or premises. Premises liability impacts businesses that own business property (including investment properties) and that are legally responsible for the safety of invited guests to that property.

 

**This may include slip and falls, personal injuries that occur at the insured premises, where the property owner/investor is determined to be the negligent party**

OTHER LIABILITY COVERAGE OPTIONS

Commercial General Liability:

This coverage is typically purchased as business insurance to cover your business operations (not on an individual per location basis). The insured on this policy would be your business operations entity, whereas the premises liability insures the entity that owns the property (which could be different).

This coverage is needed when:

• Your investment business operates out of an office space and needs premises liability coverage.
• You are concerned about lawsuits arising from Slander or Libel lawsuits. This is a Personal & Advertising Injury exposure. Some may also extend to wrongful eviction exposure (depending on the policy wording).
• You have Products & Completed Operations exposure. This extends to lawsuits surrounding faulty workmanship (not intentional) after the completion of a project.

** If you are performing renovations on a property you own, you need to obtain this coverage through a General Contractors Liability policy. Premises liability coverage does NOT include Products & Completed Operations coverage.**

Umbrella or Excess Liability:

This coverage extends the limits of your underlying premises liability policy in case they are exhausted on a single occurrence (and may also be able to go over other commercial liability policies such as commercial auto, general contractors, or commercial general liability).

This coverage is needed when:

• You want or are required by your lender to carry limits of liability in excess of the limits your underlying premises liability policies provide. NREIG policies offer limits of $1 million per occurrence/$2 million annual aggregate, $1 million per occ/$5 million aggregate, and $2 million per occ/$5 million aggregate per insured location.

Hired / Non-Owned Auto Liability is needed when:

• You or your employees use your personal automobiles to run errands for the business. This coverage would extend if (during one of these errands), you or your employee is the cause of an accident.
• You or your employees rent automobiles for company trips and need insurance to cover them.

Errors and Omissions (Professional Liability) coverage is needed when:

• You offer or sell professional services (where the performance of these services could cause a loss), or could be sued for errors in judgement, breaches of duty, or negligent or wrongful acts in business conduct (UNINTENTIONAL ACTS).

Directors & Officers coverage is needed when:

• Directors and officers of your corporation could be held liable from the performance of their professional duties on behalf of the corporation (UNINTENTIONAL ACTS).

Property Management Professional Liability (or PM E&O) coverage is needed when:

• You are acting as a property manager – this protects all types of property management professionals if a tenant alleges that you were professionally negligent or failed to perform duties as promised in your contract.
• If you are utilizing a professional Property Manager, you should require them to carry this coverage with you or your entity listed as Additional Insured.

Employment Practices Liability (EPLI) coverage is needed when:

• You have employees and have exposure for wrongful termination, discrimination, sexual harassment and/or failure to promote.

Wrongful Eviction coverage is needed when:

• You may need protection against a problem tenant who claims to have been wrongfully evicted.

**Important note – this coverage can be purchased on a stand-alone policy, or is often covered under the Personal & Advertising Injury limit on most General Liability policies.**

As is true with every other coverage above, intentional acts (including criminal acts and breach of contract) are not covered.

General Contractors Liability is needed when:

• You are licensed and acting as the general contractor on your own property or are hired for a customer’s renovation project.
• If you hire a General Contractor, you should require them to carry this coverage with you or your owning entity listed as Additional Insured on the Certificate of Insurance.

**Premises liability coverage does NOT extend to injury of anyone hired to be onsite that occurs at the insured premises. Nor does it cover faulty work of any hired contractors.**

Worker’s Compensation coverage is needed when:

• You have employees and need to provide coverage for medical benefits and wage reimbursement for employees injured during the course of employment. Employees in return, relinquish their rights to sue you for the tort of negligence.

Cyber Liability coverage is needed when:

• You are housing private information of your tenants online or collecting rent payments online.
• You need coverage for wrongful acts (an act, error, omission, negligent supervision, misstatement, or misleading statement by an insured) in connection with material on an internet site owned by the insured, or related social media.

These are broad guidelines to help gauge your liability needs. If there are any questions on your potential needs, please contact us.

Premises liability is the legal principle that property owners have some level of accountability for accidents and injuries on their property, or premises. Premises liability impacts businesses that own business property (including investment properties) and that are legally responsible for the safety of invited guests to that property.

**This may include slip and falls, personal injuries that occur at the insured premises, where the property owner/investor is determined to be the negligent party**

OTHER LIABILITY COVERAGE OPTIONS

Commercial General Liability:

This coverage is typically purchased as business insurance to cover your business operations (not on an individual per location basis). The insured on this policy would be your business operations entity, whereas the premises liability insures the entity that owns the property (which could be different).

This coverage is needed when:

• Your investment business operates out of an office space and needs premises liability coverage.
• You are concerned about lawsuits arising from Slander or Libel lawsuits. This is a Personal & Advertising Injury exposure. Some may also extend to wrongful eviction exposure (depending on the policy wording).
• You have Products & Completed Operations exposure. This extends to lawsuits surrounding faulty workmanship (not intentional) after the completion of a project.

** If you are performing renovations on a property you own, you need to obtain this coverage through a General Contractors Liability policy. Premises liability coverage does NOT include Products & Completed Operations coverage.**

Umbrella or Excess Liability:

This coverage extends the limits of your underlying premises liability policy in case they are exhausted on a single occurrence (and may also be able to go over other commercial liability policies such as commercial auto, general contractors, or commercial general liability).

This coverage is needed when:

• You want or are required by your lender to carry limits of liability in excess of the limits your underlying premises liability policies provide. NREIG policies offer limits of $1 million per occurrence/$2 million annual aggregate, $1 million per occ/$5 million aggregate, and $2 million per occ/$5 million aggregate per insured location.

Hired / Non-Owned Auto Liability is needed when:

• You or your employees use your personal automobiles to run errands for the business. This coverage would extend if (during one of these errands), you or your employee is the cause of an accident.
• You or your employees rent automobiles for company trips and need insurance to cover them.

Errors and Omissions (Professional Liability) coverage is needed when:

• You offer or sell professional services (where the performance of these services could cause a loss), or could be sued for errors in judgement, breaches of duty, or negligent or wrongful acts in business conduct (UNINTENTIONAL ACTS).

Directors & Officers coverage is needed when:

• Directors and officers of your corporation could be held liable from the performance of their professional duties on behalf of the corporation (UNINTENTIONAL ACTS).

Property Management Professional Liability (or PM E&O) coverage is needed when:

• You are acting as a property manager – this protects all types of property management professionals if a tenant alleges that you were professionally negligent or failed to perform duties as promised in your contract.
• If you are utilizing a professional Property Manager, you should require them to carry this coverage with you or your entity listed as Additional Insured.

Employment Practices Liability (EPLI) coverage is needed when:

• You have employees and have exposure for wrongful termination, discrimination, sexual harassment and/or failure to promote.

Wrongful Eviction coverage is needed when:

• You may need protection against a problem tenant who claims to have been wrongfully evicted.

**Important note – this coverage can be purchased on a stand-alone policy, or is often covered under the Personal & Advertising Injury limit on most General Liability policies.**

As is true with every other coverage above, intentional acts (including criminal acts and breach of contract) are not covered.

General Contractors Liability is needed when:

• You are licensed and acting as the general contractor on your own property or are hired for a customer’s renovation project.
• If you hire a General Contractor, you should require them to carry this coverage with you or your owning entity listed as Additional Insured on the Certificate of Insurance.

**Premises liability coverage does NOT extend to injury of anyone hired to be onsite that occurs at the insured premises. Nor does it cover faulty work of any hired contractors.**

Worker’s Compensation coverage is needed when:

• You have employees and need to provide coverage for medical benefits and wage reimbursement for employees injured during the course of employment. Employees in return, relinquish their rights to sue you for the tort of negligence.

Cyber Liability coverage is needed when:

• You are housing private information of your tenants online or collecting rent payments online.
• You need coverage for wrongful acts (an act, error, omission, negligent supervision, misstatement, or misleading statement by an insured) in connection with material on an internet site owned by the insured, or related social media.

These are broad guidelines to help gauge your liability needs. If there are any questions on your potential needs, please contact us.