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Extending Your Coverage When Others are at Fault

As the information on reveals, a business owner can be held liable for personal injury, property damage, bodily injury caused by a party or partner the business has a contractual relationship with. This is considered a contingent liability, or indirect liability, and it falls under the general liability exposures of business operations.

What is Protected?

Just as a general liability policy is able to protect a company from several areas of property damage, or bodily injury occurring to patrons or individuals on the business premises, contingent liability insurance works to protect instances where subcontractors, employees, agents, or contracts are responsible for the damaging incident. For example, if a grocery store hires a contractor to repaint its exterior sign and a paint bucket falls on a customer, the grocery store can be held liable for the incident. However, a standard liability policy might have this incident listed an exclusion, therefore carrying a supplemental contingency policy is wise.

Adequately Covers Risks

Every business has some risk of the contingent liability, although the amount and extent of coverage will vary according to your business’s operations. Your policy advisor will be able to tell you how effective your current plan is when facing these additional risks, and you may be able to include a rider or endorsement for these potentially uncommon areas of exposure.