Your business insurance value is not the same as your policy premium. The real value of an insurance portfolio relates directly to the risks you insure against and the limits and endorsements that apply to those risks. If you are not an insurance expert, meet with an insurance advisor to review your policies, limits, covered risks, exclusions and any duplicate or missing coverage.
For more detail on how coverage, policy language and common liability clauses affect small businesses and contractors, see Business Insurance: Agencies, Coverage Value, CGL Clauses & Risk Reduction.
Understand the language
Policy forms and endorsements matter. One example involves manufacturers and a Classification Limitation Endorsement: the policy may limit covered work by classification, and you might not know the limitation until after a claim. If a claim is denied because of misclassification, resolving who pays can be costly and time-consuming.
Occurrence vs. claims-made professional liability
Occurrence professional liability pays for claims that occurred during the policy period, regardless of when the claim is filed; that provides long-term protection for incidents that happened while the policy was in force. Claims-made policies cover claims made while the policy is active. They are often less expensive initially, but they can leave gaps if you change carriers or the insurer stops writing that line.
With claims-made coverage you typically need an Extended Reporting Period (ERP) or "tail" if you leave the policy or the carrier cancels the line; tail coverage can be expensive and is sold separately from the base claims-made policy.
Endorsements that affect coverage and cost
Endorsements modify the base policy and can materially change who is covered and for what. Examples include pollution liability, per-project aggregates, and additional insured status for project owners. Always confirm the exact wording of an endorsement so you understand whether the additional protection you expect is actually provided.
If you work on projects where pollution, environmental design or remediation is possible, confirm whether pollution liability is included or added by endorsement. For project-based work, a per-project aggregate can raise the aggregate limit for each job to the full limits of liability rather than sharing one aggregate across all jobs.
When an owner requests to be named as an additional insured on your policy, that status is added by endorsement and the scope of that coverage depends on the specific endorsement language.
Other coverages
Some additional coverages to review include crime insurance, inland marine, and libel/slander (media liability). Employee theft in particular may be covered under a crime policy; for more on crime coverages, see Substandard Crime Insurance.
- Employee theft
- Inland marine
- Libel / slander (media liability)
- Other specialty endorsements
When endorsements are added, you can accidentally duplicate coverage and pay unnecessary premium. An experienced advisor can help avoid duplication and ensure you buy the coverage you actually need.
Before you finalize changes or purchase new coverage, ask your agent to explain what is covered, what is excluded, and how endorsements affect limits and defense obligations; if you prefer an online request, you can ask your agent for a formal quote.
Frequently Asked Questions
What is the difference between occurrence and claims-made professional liability?
Occurrence covers claims based on when the incident happened, even if reported later; claims-made covers claims reported while the policy is active and may require tail coverage when the policy ends.
Why should I check endorsements on my policy?
Endorsements change coverage scope and limits; reviewing them helps you avoid gaps, misclassification issues, or duplicate coverage that wastes premiums.
Do standard CGL policies cover pollution damage?
Commercial general liability policies typically exclude pollution unless a pollution endorsement is added to provide specific legal liability protection for pollution-related injury or property damage.