General liability monoline insurance is a policy that isn’t part of a commercial insurance package. For example, business owners policies bundle general liability, commercial property and business interruption insurance. A standalone general liability insurance policy is monoline.
Learn more about general liability monoline insurance and how it works.
What is Monoline Insurance?
Monoline insurance is a policy that just covers 1 type of insurance. Commercial insurance is often sold as a package. For example, a dental office might work with an insurance company and have a package policy that includes general liability insurance, property insurance and business interruption insurance.
The office might also buy monoline insurance to cover other risks, like professional liability insurance (malpractice insurance) and workers’ compensation insurance.
Monoline insurance can also be used to address risks that aren’t covered by standard policies. If your business faces unusual risks, it might need a monoline policy to address these specific risks.
How Monoline Insurance Works
How monoline insurance works depends on the type of policy. In general, it covers the specific events outlined in the policy. When you experience a covered event, you file a claim with the insurance company. The insurance company reviews the claim and may approve it, deny it or request additional information.
If your claim is denied, you can typically appeal the decision. If your insurance company denies a legitimate claim, you can also file a lawsuit in civil court.
How to Buy Monoline Insurance
The 1st step to buying a monoline insurance policy is deciding whether you need one. Many businesses purchase general liability insurance as part of a business owners policy (BOP), but that’s not a good fit for everyone. BOPs are best for small- to medium-sized businesses with standard risks.
If your business is large or has unusual levels of risk, you may need a monoline policy. In that case, you could see if the insurance company that carries your other business insurance policies offers a monoline general liability policy.
If it doesn’t, consider talking to an insurance broker if you’re not already working with one. Insurance brokers work with multiple insurance companies to find the best policies for their clients. They can help you find the best company for the risks your business faces.
Once you find a potential policy, you’ll complete an application. It will ask for information about you and your business, including your business location, the type of business you have, the number of employees, your annual revenue, your claims history and details on how your business operates.
The insurance company will review your application and may ask for additional information. Once it makes a decision, it will let you know whether you’re approved or denied.
Are General Liability Policies Standardized?
Many general liability policies are standardized. The Insurance Services Office (ISO) is an insurance industry organization that develops standard policy forms. Policy forms are the language that’s used in insurance policies. The ISO has a general liability form that many insurance companies use, so there’s a good chance your policy is standardized.
If your business faces unusual risks, then you may not have a standardized policy form. That’s why it’s critical to review policy documents and ensure you’re familiar with what’s covered and what the policy excludes.
General Liability Classes
When you apply for a general liability policy, your business is assigned a class code. Class codes help insurance companies group similar businesses together. Businesses are grouped based on their industry and on the risks they face.
Insurers use class codes to determine your insurance premiums. They need to charge enough to cover claims and make a profit. They use other factors to determine your rate as well, including the size of your business, your claims history, the number of employees you have and the size of your payroll.
What Does General Liability Insurance Cover?
General liability policies typically cover:
- Bodily injury: If a client or vendor is injured on your business property or in an incident related to your business, a general liability policy will help cover any related legal costs.
- Property damage: If a client or vendor’s property is damaged, a general liability policy will help with the legal costs and any settlements or awards.
- Personal and advertising injury: If you’re sued for false advertising, copyright infringement, libel, slander or something similar, this policy will help with the legal costs.
- Medical payments: General liability policies will typically pay medical payments directly to someone injured on your business property or in an incident related to your business. Instead of filing a lawsuit, the injured party can submit claims to your insurance company for payment.
General liability insurance covers non-professional negligent acts. If the negligence is related to your professional expertise, you need professional liability insurance to cover it.
Who Needs General Liability Insurance?
All businesses should consider general liability insurance. You need liability insurance if you:
- Interact with clients and vendors
- Own a business space
- Work on client property
- Advertise your business
- Use other locations to conduct business
If you partner with other businesses, they may request proof of your liability coverage.
Without general liability coverage, your business is vulnerable to lawsuits. Property damage and medical costs can add up, and if you’re found responsible, you’ll need to pay the costs out of your personal and/or business assets. General liability insurance can help protect those assets.
Pros and Cons of a Stand-Alone Policy
What are the benefits and drawbacks of a monoline policy?
Pros
- It may cover losses that aren’t typically found in a package policy.
- It may offer higher coverage than a package policy.
- It may be written specifically to cover your business.
- You can have policies with multiple insurers instead of having bundled policies with one insurer.
Cons
- It may be more expensive than a packaged policy. Insurers often discount package policies like BOPs because it keeps your policies in-house.
- Claims may be more complicated. If your policy isn’t standardized, it might take more time for the insurance company to sort out and pay your claim.
Best General Liability Monoline Insurance
Where should you buy general liability monoline insurance? Here are Benzinga’s recommendations.
Is General Liability Monoline Insurance Right for You?
If you have a small business that doesn’t face unusual risks, a BOP may be a better fit than a monoline general liability policy. BOPs include other important types of coverage (commercial property and business interruption insurance), and they’re often less expensive than buying each type of coverage as a stand-alone policy.
If you have a larger business, a small or medium business with unusual risks, or you want to tailor your coverage, a monoline policy may be a better fit. You may have more options for policy limits and deductibles, and you can buy it from a different insurer than the one that holds your commercial property and other insurance policies.
The best way to learn which type of policy is right for you is by working with an experienced insurance agent or broker. They can help you determine which policies your business needs and whether it’s better to bundle or buy monoline policies.
