Orchestrating a contract is sticky business. Contractual language can be difficult to navigate – especially for those who are not versed in these types of agreements. It is hard enough to understand every facet of the contract but incorporating insurance requirements or additions makes it all the more complicated.
At G2 Insurance Services, we want to help educate people about how to read and understand the insurance side of these documents. Luckily, we are extremely versed in the insurance requirements or additions that are often times implemented in contracts.
Types Of Insurance Requirements/Additions You’ll Find In Contracts:
Since we have so many different avenues for starting businesses these days – the number of policies that you may or may not see in a contract have increased. Here are a few common policies we think are important to understand:
- General Liability: You will find this insurance requirement in almost every contract. That is because it covers the most basic types of damage that could occur. This will include claims like property or bodily damage. You will want this policy so you can safely provide your service/product.
- Data Breach/Cyber Liability: This type of coverage has become more prevalent in the last few years for obvious reasons. Essentially, you are covering the transference of digital information. Data has security risks of being breached when sent online. You want to ensure that you are covered during a data breach and have the proper resources to address the breach. In addition, you need to protect yourself if you accidentally transfer a virus to others.
- Property Insurance: While General Liability is there to protect you from being sued it won’t cover your personal property. Many contracts, specifically leases, will require you to cover the property you own or is in your care. The types of property can include your inventory, a build-out, or maybe even an entire building you lease.
- Errors & Omissions (Professional Liability): While General Liability covers injuries and damage to others property, E & O Liability will cover a potential mistake you make costing your client money. While this coverage used to be limited to Doctors and attorneys and other advanced degree professionals it is becoming more commonplace for other industries.
- D&O: Depending on the size of your organization – you may or may not need to consider having Directors & Officers Liability coverage. If you are in a highly regulated industry that deals with investors or board members you are going to want to review the Directors & Officers Liability. This is also a very common coverage for non-profits including associations such as condo or homeowners.
Engaging in a contract should be a trustworthy situation. We think that everyone should have the knowledge and know-how to navigate the insurance requirements in a contract without feeling nervous. If you have a contract that seems like it is a foreign language or impossible to understand then you need to reach out to a team like G2 Insurance Services.
Our staff is ready to help you understand the insurance requirements in a contract and give you the details of significant risk before you sign on the dotted line. WE ARE INSURANCE NERDS! We love putting our nose to the ground and analyzing contracts.
If you find yourself reading through a contract and scratching your head – CONTACT US! We are always available to give your situation a review and schedule a free and confidential initial consultation.