Professional Liability vs. General Liability

It is common knowledge that having proper insurance coverage is very important to help businesses avoid risks and financial devastation; what is not so obvious is deciding which policies are appropriate for your specific company. 

There are different types of Liability Insurance that can protect your business as well as the people with whom your business interacts. You may have heard the terms "General Liability" and "Professional Liability" but not know or understand exactly what they are.

“General Liability” typically covers claims of bodily injury and/or property damage. General Liability can be referenced as: 

1. Exposure as work performed physically with your hands or,
2. Performing an act on a physical object. 

For example, if a plumber is repairing a pipe inside of a home and fails to properly tighten the pipes together, resulting in a leak that causes damage to the home, then General Liability would typically cover the damages.

“Professional Liability” also covers bodily injury and property damage that is caused from a non-tangible occurrence. Businesses who carry professional liability coverage’s are paid to perform a certain non-tangible task. If the task if not performed correctly, then that business can be responsible for the damage done. 

For example, An engineer provides a set of blue prints to a home owner to build their pool. The blue prints provided contained errors and flaws affecting the integrity of the structure. If structural damages arise from the design of the blue prints, professional liability would most likely cover this exposure.

Fake and Fraudulent PEO's: Part I

Currently, 60% of all Professional Employer Organizations (PEOs) in business in the state of California are not legitimate. This bad majority likes to call them selves “Staffing Companies”. These organizations pose and operate like a PEO on the outside to their customers, but inside they pose as a Temporary Staffing Company to their insurance company. 

You are probably wondering, "Why would this affect me?". Working with these types of staffing companies can put your business at risk by leaving you responsible for a claim because of their insufficient insurance coverage. Most staffing companies are not educated with the insurance industry and don’t understand the potential danger that they expose their customers to. 

Before considering a quote from a PEO, make sure to contact an experienced PEO insurance broker first who can refer you to a reliable PEO or do research on a PEO you may already have in mind.

Workers Comp Audits and 1099’s

Workers Compensation insurance companies are always out to collect premium on your 1099’s. Make sure to keep an eye out on a few key things, listed below. 

• 1099 Independent Contractors must have at least two sources of income other than your business. 
• 1099’s should have their own General Liability Insurance Policy.
• They also must carrying their own license to perform the service (if applicable). 

If you can prove that all three of the above items are applicable to each of your 1099 independent contractors during the annual audit, it will be a breeze. 

If have any questions regarding an audit or if you need assistance with your business insurance workers compensation audit, please feel free to contact us at 818-735-7600