Supply chain management is all about protecting your supply chain and your suppliers, yet incidents in the workplace can still occur. When incidents do occur, they can be detrimental to a business and cost an organization thousands or even millions in liabilities.  

Businesses and their third-party supplier networks may be held liable for things like bodily or personal injury or property damage caused by the operations, services, or products. How can these organizations protect themselves?  

If an incident does occur, commercial general liability insurance can help with liabilities.

What is Commercial General Liability Insurance?

A commercial general liability policy provides coverage to a business for bodily injury and property damage arising out of the operations of a business. The coverage for most commercial general liability policies starts around USD 1 million.

Commercial general liability is not required by law, but it is in almost all cases required of vendors and suppliers to show proof of a commercial general liability. Companies can use tools to help vet these suppliers and easily check their insurances and qualifications. This is one of the most effective ways for companies that use third-party contractors to transfer risks for their suppliers’ mistake.

What Additional Insurance Can You Require?

Although commercial general liability is a critical component to the risk management structure of a business, it sometimes isn’t enough to protect against the impacts of unforeseen events. Additional insurance options include:

• Auto Liability – For businesses that use vehicles as part of their operations, this type of insurance may benefit them. It protects these companies from any third-party damage claims from auto accidents.  

• Excess Liability Coverage – Excess Liability provides coverage limits on top of the original policy. This coverage is meant to mitigate the coverage gaps and provide a precautionary layer of protection in case the primary insurance coverage is exhausted of all possible resources.
• Workers’ Compensation – This insurance includes coverage for medical expenses and income loss in the event of a workplace injury. There are normally 3 parts:
• Medical Coverage – covers any form of medical treatment  
• Disability Coverage – covers partial compensation of lost income in the event of a worker being disabled due to workplace injury  
• Death Coverage – provides benefits to a spouse or dependent of a deceased employee

Commercial general liability protects you from incidents once they happen, but a strong risk management plan can prevent incidents all together. When you have a culture of health and safety that includes all employees, including contractors and suppliers, this limits any wrongdoing or damages.

You can start with using the proper tools to manage workers. Avetta provides solutions that can help prevent onsite incidents that lead to large liabilities by managing your supplier relationships. Learn to protect your workers, your reputation, and your business.