The risk of harm to others is inherent in the operation of any business. The general liability insurance market is highly fragmented and competitive, with a number of specialized insurers targeting specific niches within the broader general liability insurance segment.
General liability coverage is meant to protect businesses from third-party lawsuits and expenses related to them. It’s also known as commercial liability insurance or public liability coverage. In this blog post, we’ll explore high-risk business general liability insurance, what makes a business high-risk, examples of high-risk businesses and what you can do if you own one.
What Is High Risk Business General Liability Insurance?
High-risk business general liability insurance is a type of business insurance that provides protection from lawsuits and related expenses. It is commonly purchased by businesses that are involved in a number of risky activities, including construction, food and beverage, hotels and restaurants, rental properties, and other industries.
Because all businesses face potential liability issues, it’s important to have appropriate coverage, even if your business isn’t considered high risk. Businesses purchase general liability insurance as a catch-all coverage.
However, it is not enough to only have general liability insurance. There are many other types of insurance that provide specific and additional coverage, and your company needs to have multiple types of insurance to significantly reduce its overall exposure.
High risk general liability insurance is similar to general liability insurance that most businesses will have. It is tailored to the needs of businesses that have a much higher risk of needing insurance. Essentially, businesses that have a higher than average chance of having problems can get high-risk general liability insurance that is fine tuned to fit their needs better than standard general liability insurance can.
This may mean a different payout structure or a rearranged cost structure to make more frequent payouts feasible. Whatever the case, high-risk general liability insurance is the appropriate choice for companies that have an unusually high risk of problems.
Why Are Some Businesses Considered High Risk?
Generally, any business that has an increased risk of third-party bodily injury or property damage is considered high risk. Certain industries carry an inherent risk of bodily injury that may lead to costly lawsuits.
Examples of industries/operations that are considered high risk include:
Agriculture
Workers may be exposed to dangerous chemicals or animals, while dealing with heavy machinery on a regular basis. Agricultural products involve extra risk simply because it involves dealing with products that may cause people to be allergic to them or that have the potential to create a foodborne illness.
Agriculture businesses are also subject to weather risks and other conditions that could lead to crop damage and spoilage.
Food & Beverage Industry
Handling food, liquids, and cleaning chemicals in an unsterile environment puts both workers and consumers at risk of contracting a disease or illness. Food establishments carry their own risks, especially when food is involved. They may store and prepare their products in potentially dangerous ways that lead to food contamination or injury.
Construction
The construction business is highly risky because of its intense nature. While this is not a job that everyone chooses to do, it is a good career option for those looking to start their own company. Construction may entail working with heavy machinery and sharp tools, and also requires the worker to be extremely strong. This can lead to serious injuries if not properly
Hospitality Industry
All businesses that involve working in hospitality face high-risk potentials.
Hotel and Lodging
In addition to high traffic, the risk of injury increases in the event of a fire or other emergency. This can lead to extra insurance costs or lawsuit settlements, as well as the potential inconvenience to guests and employees.
Cannabis Growers
Cannabis growing is a high-risk industry. Increased competition, lack of regulation and other potential problems can lead to liability lawsuits or recalls of products. Cannabis growers need to take precautions to ensure that their crops are not subject to attacks from insects or diseases, as well as avoiding contact with airborne pesticides.
What Does High-Risk Business Insurance Cover?
High-risk business general liability insurance (also called commercial liability insurance) may cover bodily injury, advertising injury, property damage, contractual liability, and other potential claims against a business.
Bodily Injury
This type of coverage pays for legal defense expenses and compensation for physical injuries caused by employees and contractors of the business.
Property Damage
This coverage pays for the repair or replacement costs for damaged property or fixtures owned by the business, as well as for third-party damages.
Advertising Injury
This coverage protects against the costs associated with a false advertisement that causes harm to another party.
Contractual Liability
This coverage may protect a business against claims arising from breached contracts such as real estate transactions.
Other
Additional coverage may be added to provide additional protection against potential claims.
When Do You Need High Risk Business Insurance?
If you own a business that could result in a lawsuit, you should look into acquiring commercial liability insurance. If you are unsure whether your business falls into the high risk category, you should contact your insurance agent.
In addition to being a high risk operation, you should also have a history of claims or lawsuits. If you have received many claims in the past, it may be time to get commercial liability insurance to stem the risk of losing your business to high payouts for legal cases.
Call to Get a Quote for General Liability Insurance
General liability insurance is an essential part of doing business. Any business owner can face a claim for damages caused by their operations. Having proper general liability insurance coverage can help protect you against such claims. It’s important to understand what types of operations lead to higher risk and, therefore, higher premiums. You can discuss your coverage needs with an insurance agent to help you find a policy that’s right for your business.
Millers Insurance Group provides general liability insurance to companies in a variety of industries, including cannabis-related businesses. Please reach out to us or fill out our online form to get an insurance quote today for your company’s general liability coverage.
