Business liability insurance

Why?

If you are an owner of a solar business, the first type of policy you should purchase is a Business Liability Insurance. It gives you a peace of mind because it protects you against damages caused by your company, your employees, your products or yourself. This can be a minor damage, but also a large (injury) damage, associated medical costs and damage to property that occurred as a result of your business operations. If you are liable, the insurer will not only pay the damage, they will also assist you if you are held liable. In such a case the legal defense costs are paid, along with settlements and judgments should you be successfully sued.

For who?

Many parties are often involved in the realization of a PV project. As the owner of a solar business or a SPV owning the solar power installation, you are liable if damage is caused to third parties by yourself, your employee or your installation. There are various damages for which you as an entrepreneur can be held liable.

Examples:
Someone trips over a disconnected solar panel and breaks a leg (this could also be your employee).
You or your employee accidentally knock over a cup of coffee. It ends up on an expensive third-party tool.

What is insured?

• Third party bodily injury: if someone is injured at your business or because of your business, including employees and customers, you are legally liable for their injury, including medical costs.
• Third party property damage:
  in the case of doing business, you cause damage to someone else’s property, whether that’s a building or simply an item they own.
• Tenants legal liability: a damage resulting from a third-party to property you are a tenant at.

What is not insured?

• Negligence
  If you or your business is sued for professional negligence, Business Liability Insurance does not cover it. In such a case you need a Professional Indemnity Insurance.
• Commercial property
  Damage to the property where you or your business operate is not covered. In such a case you need a Commercial Property Insurance.
• Damage to customer’s property in your possession
  If you have a customer’s property in your possession for servicing, cleaning or repairing, damage to the customer’s property is not covered.
• Intentionally caused damage by a business
  If a business intentionally causes damage.

The insurance consists of several sections:

• Section I Corporate Liability;
• Section II Employer Liability;
• Section III Environmental liability (sudden environmental damage).

What are the limits?

Most Business Liability insurance policies cover up to 2,5 million Euro per occurrence and 5 million Euro in aggregate, if you need additional coverage it is common to double the limits. If you need a higher limit per occurrence, you most likely have to purchase an umbrella or excess insurance policy.

For example, if your small business is sued for €300,000 in medical costs associated with a slip-and-fall injury, but your policy limit is €250,000, you will have to cover the difference of €50,000 yourself. It is therefore extremely important to understand the necessary limit required in your kind of business. Do some industry research before purchasing a policy.

How much does Business Liability Insurance cost?

The cost varies depending on the coverage your business needs, the type of business you operate, the perceived risk associated with you or your industry, location (as some countries tend to award personal injury more than others), claim history, payroll amounts, and the number of years you have been in business.

Most annual premiums for (small) businesses range from €750 to €2,000 depending on your type of work and coverage needs. In today’s society, lawsuits are increasingly frequent. No matter how small your business is or how unlikely you think it is that you’ll ever face a claim, you’re still exposed to liability risks at work. An insurance policy costs very little when compared to the expenses your business will incur.

More information/quotation
This type of insurance is often referred to as “General Liability Insurance” or “Commercial Liability Insurance”. Call it whatever you would like, but make sure you have this policy in place. We are happy to advise you on Business liability insurance or provide a quote.