Premises and operations insurance is a part of the general liability insurance policy that your business has. It is designed to cover property damage liability and bodily injury while the general public is on the business property. This means that you are protected if someone is injured within your facility or on the land surrounding it.
If an accident occurs, the insurance company will pay up to the liability limit that you have. It does not matter if someone was injured in a slip and fall accident or if you had an employee operating machinery and they did not see an individual in their path, failing to stop.
Although you can call the insurance company to inform them of an accident and the insurance company can make a payment as long as it is proven an accident occurred due to the negligence of someone within your business, a lawsuit may still result.
Because we live in a litigious society, you can expect a lawsuit when a person has been severely injured, even if that person has their own personal injury insurance. However, the plaintiff has to have grounds, otherwise the insurance doesn't have to pay. It must be proven that the accident did occur on your property. For instance, if a person says they fell in the parking lot because there was a water hose in their way and no signs indicating that it was on the ground, yet they don't report it to an employee, there is no proof that their injuries actually happened. If you have outside cameras, you may be asked for the footage. Nevertheless, if there is no method to prove that the accident did, in fact, happen, you nor your insurance company needs to worry.
But if there is grounds for a lawsuit, your premises and operations insurance will pay for financial damages that have been incurred by the injured, but the limits that the insurance company can pay are those that you have established. You have a choice of how much coverage you want when you open the policy. Of course, the more you choose the higher the premium, but a lawsuit could result in extreme out of pocket expenses.
The insurance company will pay your legal fees. This includes the fees that you must pay to your attorney and any court fees. They will then pay financial damages to the plaintiff up to your limit. If the judgment against you exceeds the amount of coverage you have, that is when you will need to pay out of pocket.
It is unfortunate that there are businesses out there that fail to have the adequate coverage. Some don't have any at all. For small businesses and others that don't have a lot in the way of assets, this can be the demise of the business.
If you are a small business, a new business, or one that does not have a lot of assets and you are not insured, you want to make sure you acquire the necessary insurance so that you can be protected in case you are held liable for an accident on your premises. Even businesses that have been long established need the protection because it is this protection that is going to be the difference between profit and no profit.
So if you are not insured, it is time to become insured. Your general liability insurance provides a number of protections including premises and operations insurance so that you can be protected financially. Financial protection means being able to go on with your business from day-to-day the way you need to and the way your customers need you to.