Here at Outdoor Insurance Group, we provide numerous insurance products, however none may be more important than the General Liability Policy. People are often very concerned with their property, their autos and their possessions (as they should be), but the greatest risk most business owners face in the “outdoor” industry face is the threat of a lawsuit and an ensuing judgment against them. Unlike a fire or flood that can potentially destroy everything in a few minutes, a liability claim is something that can bleed the owner of all their hard-earned assets over time. The General Liability provides both legal representation for the business in the event of a lawsuit and money to pay the judgment if the business is found to be liable. I’d argue that you cannot safely operate a business in the United States without adequate liability coverage, especially in the “outdoor” world.
What is “adequate coverage”? That’s a good question. Adequate coverage is not only the right amount of insurance, but also the right policy. If you have $5,000,000 in assets to protect, a $1,000,000 or $2,000,000 policy is not adequate. People may only be required to carry a certain amount of coverage by a state agency or land lessors, but that doesn’t mean it is necessarily enough. Furthermore, the correct policy can save you numerous heartaches associated with finding out that the claim you are facing is not covered under the policy you bought. I recommend using an insurance specialist to determine what the right policy is for the exposures you face. As far as how much coverage to buy, that is entirely up to the customer. Remember, the whole idea of purchasing insurance is to be “made whole” in the event of a loss. It can be tempting to save premium by going with less coverage, but if you get hit with the big claim, you may find you have been “penny-wise, but pound foolish”. Ask your agent how much more coverage would be, it may surprise you.
I often hear three arguments against buying proper coverage. The first is “I have never had a claim in all my years of doing business”. That is indeed a great accomplishment, but you should also consider yourself very fortunate that the wrong person hasn’t come through your doors yet. You may be overdue! It only takes one person to claim you injured them or damaged their property to erase all those good years. This could be someone you’ve never met or someone you’ve known for years. The second is “I make people sign a waiver before they use my services”. The waiver is a great first line of defense, it helps the insurer defend a claim and helps weed out frivolous claims against you. However, there is nothing you can make people sign that technically prevents them from suing you if they are injured, it simply makes it a matter for the courts. Ultimately a judge or a jury of your peers will decide whether you were at fault or not and what the appropriate judgment should be. Don’t risk everything on a waiver or a handshake. Finally, the other argument is “ I don’t have a million dollars worth of assets, I don’t need that much coverage”. You must take into account future earning potentials, both yours and theirs. The plaintiff is only concerned with recouping their losses, not your current financial situation. What if it’s a young professional such as a surgeon that was injured and can never work again? That can be a huge claim and will most likely easily exceed $1,000,000. The point is, an uninsured loss can haunt you for years after the accident occurs so it is important to take the long view.
Ultimately, the decision to buy insurance and how much to buy is one that can only be made by the purchaser. When an agent advises you that higher limits of insurance are available, it isn’t necessarily because they are trying to sell you more product, it’s because many have seen the results of inadequate insurance. You may just be buying a policy because you need to, but you should also be buying one because you want to protect yourself, your family, and your future. We are the most litigious society in the history of the world. All one needs to do is turn on the TV and there are legal teams waiting to take your call and file a suit against someone. While you can certainly use various risk management techniques and loss control practices to minimize your exposure, you cannot prevent someone from simply claiming you were at fault. The peace of mind that comes with knowing you have a team of lawyers to defend you and a large sum of money available “just in case” is why you need a General Liability Policy.