The Cone Company services the insurance needs of out-of-home advertising companies. Last week, Brian discussed how he started representing out-of-home companies in the insurance marketplace. Today, Brian explains general liability insurance and why it matters for your out-of-home company.
Let’s start with “GL”. What is General Liability, and why do out-of-home companies need it?
It probably helps to address why the word “General” is used. A GL policy’s main purpose is to protect a business from a wide array of lawsuits. These lawsuits are brought on by 3rdparties for property damage or bodily injury that your company caused, or that they claim your company caused. Rather than trying to anticipate specific types of lawsuits that may arise, which would be numerous, the demand was for a catch-all product that covers all 3rd party claims against the company. When property damage or bodily injury triggers coverage, the insurance company has a duty to defend the policy-owner, pay their defense costs, and pay damages to the 3rd party up to the policy limits, which are most always $1,000,000 per occurrence with a $2,000,000 aggregate for the annual policy period. That’s the basics. From there, people typically discuss common exclusions and policy features.
What is excluded from a general liability policy?
Most common GL exclusions are excluded because they are intended to be covered under a separate type of policy. For example, bodily injury to your employees is excluded because it is covered under a Workers’ Comp Policy. Bodily Injury or Property Damage that arises out of driving vehicles is excluded because it is covered under a Commercial Auto Policy. Property Damage to your own property is covered by your property policy. Similar exclusions are often listed because the insurance company could not be profitable if it covered certain types of claims. Cyber-related and pollution-related claims are excluded because insurers have determined these types of claims need separate policies also. And while pollution exclusions are not a concern for out-of-home companies, the “Media and Advertising Liability” Exclusion is. All lawsuits that are either brought by your customers for errors or omissions in ads that run on your sign, claims involving defamation or libel/slander, as well as claims where digital boards have been hacked or the ad has been improperly run, are all excluded claims from the GL policy. It’s a common oversight because “personal and advertising injury” is covered on most GL policies and sometimes the coverage is listed in the declarations pages of your policy, but read the fine print in the back which will say – “unless you are in or tangential to the advertising business”, in which case the coverage is excluded.
Why do landlords require out-of-home companies to carry general liability?
Because a landlord’s own policy won’t cover damage caused by your workers, your subcontractors, or your sign. If your crew is out on the landlord’s property changing a face and something falls and damages a car in the parking lot, that claim won’t be covered under the landlord’s policy. Your general liability policy is what covers the damage your operations cause on someone else’s property.
What is the state of the general liability market, and what coverage limits do landlords typically require?
The general liability market for out-of-home is somewhat soft right now. There aren’t many companies willing to insure out-of-home companies, but the ones that do are charging adequate rates and premiums are very low. Premiums are largely based on annual payroll and subcontractor costs, which are very low compared to other industries; therefore, out-of-home companies’ annual GL are also comparatively low. If you have less than $200k in annual payroll plus annual subcontractor costs, you can expect to pay less than $2000 per year.
Most landlords stick to the $1M per occurrence requirement. Larger entities and risk-averse entities—universities, major real estate companies—might ask for $2 million to $5 million. Worth knowing: if a landlord pushes for higher limits than you currently carry, it is often worth pushing back. In many cases, it is not a deal-breaker, and it’s seen as no harm to find out if it is.
To learn more about how The Cone Company can support your out-of-home business, contact Brian Cone at BCone@theconeco.com or 334-272-4791
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