| You've got pen in hand, ready to sign a new client | | | | Not covered under property insurance. Your small |
| contract, and then you glance at the fine print. It | | | | business property insurance policy covers only |
| says that to get the work, your IT business needs | | | | property damages, not bodily injury. So if your |
| to carry five different kinds of insurance. That can't | | | | employee drops that heavy piece of equipment after |
| be right! Or can it? | | | | suffering the injury, this policy would pay for any |
| If you've already got E&O, general liability and small | | | | damages caused to the equipment or the building -- |
| business property insurance, aren't you insured for | | | | but it wouldn't help pay your employee's medical bills. |
| just about everything? Why would you need to get | | | | Not covered under professional liability. Your |
| workers' comp and employers' liability, too? | | | | professional liability or E&O insurance policy protects |
| Besides the fact that many states have laws that | | | | you only against lawsuits in which a client alleges that |
| require companies with W2 employees to carry | | | | your business's negligent acts, errors or omissions |
| workers' compensation coverage, these policies | | | | caused them a financial loss. Again, no coverage for |
| simply provide coverage that other types of business | | | | bodily injury to an employee. |
| insurance don't. To protect their own interests, your | | | | Covered! Your workers' comp policy covers your |
| clients want to be sure that you're protecting yours. | | | | employee's medical and disability expenses in the |
| Liability vs. other types of insurance | | | | event of an illness or injury, such as this case. So, if |
| First, it's helpful to understand the difference | | | | your employee is going to miss work for a few |
| between a liability policy and other types of insurance | | | | weeks while he recovers, it will pay him a portion of |
| coverage: | | | | the income he'll lose. It will also pay any bills for |
| Liability policies are designed to protect your | | | | doctor's visits, medication, diagnostic tests, therapy |
| business from the high cost of covered lawsuits or | | | | or hospital stays directly related to the on-the-job |
| similar insurance claims, and any settlements that a | | | | injury. So, if your employee is hurt on the job and |
| court orders you to pay as a result. | | | | you have workman's comp coverage, you won't |
| Other types of commercial policies, such as small | | | | have to pay those costs out of pocket. |
| business property or workman's comp insurance, | | | | Your employer's liability policy, typically included |
| reimburse your business for all or part of actual costs | | | | as part of a workers' comp policy, protects your |
| on covered claims, such as the replacement of a | | | | company should an employee claim that his or her |
| damaged piece of hardware or medical bills. | | | | injury or illness was caused by your company's |
| So depending on what situation you may end up | | | | negligence or failure to provide a safe workplace. So |
| dealing with - a lawsuit, injury or physical damage to | | | | if the employee in this case sues you, this policy pays |
| property - you'll need different kinds of insurance to | | | | legal fees and any settlement the court may order |
| be fully covered. Different types of insurance policies | | | | you to pay, up to stated policy limits. |
| address situations involving different people, too: | | | | But I'm just a one-person operation! |
| Some respond to claims from clients and others | | | | What if you don't even have employees? Can your |
| outside your business, while others are designed for | | | | client still insist that you carry workers' comp? In |
| claims from your own employees or subcontractors. | | | | short, yes. |
| How each policy responds | | | | In many states, unless your client can show that you, |
| Let's talk about how the various types of insurance | | | | its subcontractor, carry your own workers' |
| policies would respond in the event of an on-the-job | | | | compensation insurance, you will be automatically |
| injury. Suppose one of your employees is working at | | | | covered under the hiring company's policy, at the |
| a client's site and suffers a serious back injury while | | | | hiring company's expense. And of course, your client |
| moving a heavy piece of equipment: | | | | doesn't want that. So even if your state doesn't |
| Not covered under general liability. Your general | | | | require it for one-person companies, you may have |
| liability insurance policy covers claims of bodily injury | | | | to buy coverage just to meet your client's |
| or other physical injury or property damage. It is | | | | requirements. |
| designed to protect your business against the high | | | | If you use subcontractors, they may be exempt |
| cost of lawsuits stemming from incidents that occur | | | | from your state's workman's comp insurance |
| on your premises or at other covered locations | | | | requirements -- but on the other hand, some states |
| where you normally conduct business. If it were a | | | | do require companies to cover 1099 contractors. |
| client that were to sue you over an injury caused by | | | | That's why so many small IT companies do what |
| you or one of your employees, your general liability | | | | their clients do: Require their own independent |
| policy would respond. But a lawsuit from one of your | | | | contractors to carry their own workers' comp |
| own employees, claiming that your business is | | | | insurance policy, so that they don't have to pay for |
| responsible for his on-the-job back injury, wouldn't be | | | | their coverage themselves. |
| covered. | | | | |