Lesson 3 of 11
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Workers Compensation and General Liability Coverage

Collin Gabriel August 19, 2022

Key Terms:

Coverage – The amount of protection in terms of a sum of money that the insurance company provides to an insured person in the event of an insured risk.

Limit – The maximum amount of money an insurer will pay toward a covered claim or peril.

Commercial general liability insurance A policy that protects a business from claims that it caused bodily injury or property damage to another person or their belongings.

Umbrella policy – A form of liability insurance that provides extra liability coverage above the limits of the policyholder’s liability policies. It is a policy designed to provide protection against catastrophic losses.


Craig Vattiat (00:01):

So we’ll first start with workers’ compensation insurance. And if you employ workers, then you have to purchase workers’ compensation insurance businesses without this insurance we’ll face civil penalties. So it’s really important that you understand if that’s a need for your, your business. Be sure to discuss this with your agent again, and you can also contact the office of the small business on Budsman. Um, there’s a link to the website there as well as the phone number for that office. And that can help answer some of those questions for you. Moving on to commercial general liability insurance. If someone’s injured while visiting your business premises, or if a customer is hurt by a product, your business sells, then you can be held responsible for that. And so liability insurance is gonna cover your business against a range of those risks, including unintended bodily injury damage to others’ properties.

Craig Vattiat (01:03):

So for example, if you’re a painter and if you over spray, if you have overs spray that maybe, uh, lands on a, um, a neighbor’s car and, and damages their car, that would be an example of that damage to others’ property. Uh, another example might be if you leave a client’s water running at their home and cause damage to it. So that would be an example of that liability protection there. Personal liability protection is another, uh, part of this coverage, which might include slander or liable and also false or misleading advertising. So it’s really important to accurately estimate the value of your business to make sure that you’re adequately insured. And again, your agent can help you with that estimate. Uh, you don’t wanna be in a situation where you’re underinsured and so make sure that you’re reviewing again, that insurance coverage you have every year. Just keep in mind. Yeah, go ahead, Jonie.

Joni McSpadden (02:04):

Sorry. Um, I didn’t mean to cut you off in the middle of that on, um, the personal injury, including slander and liable, uh, would a claim have to be like formally charged for slander and liable?

Craig Vattiat (02:21):

Well, if let’s say, um, a consumer is brings a civil case, Southern, they’re gonna maybe file a lawsuit, then this would be a situation where your insurance would help to protect you in case of that civil lawsuit.

Joni McSpadden (02:40):

So a lawsuit would probably have to initiate that before

Craig Vattiat (02:44):

You can. Yeah.

Joni McSpadden (02:45):

Thank you.

Craig Vattiat (02:45):

Yeah, it would come up in through the court system, you know, somebody might file lawsuit against you, and then again, this liability insurance would be the protection that you have against, uh, that of thing, whether it be for the legal fees associated with defending that case, uh, as well as the potential outcome of the case.

Joni McSpadden (03:10):

And then on the false and misleading advertising, would that be false and misleading advertising that the business owner has put out or has been put out against the business owner?

Craig Vattiat (03:21):

Yeah. Now this would be again liability. So this would be any claim against you that, um, that you might be liable for that misleading, uh, or false advertising.

Joni McSpadden (03:32):

Okay. Thank you.

Craig Vattiat (03:33):

It’s protect. Yeah. It’s protecting your business. Yeah. So, um, another consideration here is at an umbrella policy that would go above that standard liability coverage limit. You know, so your commercial general liability insurance is gonna have a limit. Adding an additional umbrella policy would give you coverage beyond that amount, um, that would even further protect your business. So look into that. If, if you’re concerned about not having adequate coverage,

Collin Gabriel (04:04):

You know, I, a little anecdote on that. Uh, cause I actually, a long time ago in college, I used to work at, uh, Geico. And one of the things that they mentioned, um, was when you say the term umbrella, just help people understand that it’s like if you’re holding up an umbrella and the rain is falling down on a part of your body, the policy is meant to cover that part of the body that would be exposed to rain. It, you know, it it’s an extension of your insurance and things like that. And I, I always remember it was the term was used so many times before that was explained to me. And I was like, what is an umbrella policy? Why do they keep saying that? So, um, yeah, just in case anybody was wondering what that means, just an extension to the insurance you currently have that covers the parts of you that are not covered or, or part of the original, uh, insurance policy.

Craig Vattiat (04:52):

Yeah. That’s a great example. Colin, thanks. Yeah. And just kind of a story to go along with this. Um, again at Oregon DFR, we have consumer advocates that help answer calls. And so we hear about some of these stories. And so in this particular situation, there was a slip and fall at a place of business. And that’s a real common example of exposure to that liability, right? And so we recently handled complaint where a con, a consumer visited at least 10 different medical facilities, racking up, you know, thousands of dollars in medical bills and had the business owner not had that commercial liability coverage. They might have ended up paying the cons the customer directly or paying those costly legal fees to fight that claim. So again, no matter who was found liable in that situation, having that insurance in place really helped that business. So that’s a great example of why you might need it.

Joni McSpadden (05:48):

So Craig, if, um, there’s a company that, uh, a small business that let’s say is a commercial cleaner, uh, company where they’re going into business offices to clean those offices. Um, and there’s an injury there who would bear the cost of that.

Craig Vattiat (06:09):

Yeah. So again, if it’s caused by that business, right, those cleaners, let’s say it’s damaged to the property. Somehow they damage the property of the office that ultimately they could be held liable for that and be forced to pay the cost associated with that damage. And again, this is where that commercial general liability insurance protects your business from those types of claims. You know, these are things that are unintended by you to, by you as the business owner happening, those mistakes can happen. And this is the kind of coverage that would help protect your business from that flat liability.