A question many business owners ask when they are thinking about purchasing commercial liability insurance, is, “How much coverage is enough?” For one Florida construction firm, the answer became clear after a tragic accident resulted in a lawsuit and a $3.6 million settlement.
A Tragic Accident –A Costly Lawsuit
In 2006, two construction workers were working on a Miami apartment building. As they were helping a crane operator lift large concrete beams, a cable on the crane touched a live electrical wire. The shock caused one of the workers to have a heart attack. The other man lost his right arm and two fingers on his left hand.
The workers sued the property owner, the general contractor on the project and the owner and operator of the crane. They also filed a lawsuit suit against the steel erection contractor who hired the crane operator. In addition, the worker who had a heart attack filed a Worker’s Compensation claim against the steel erection firm.
The court dismissed the case against the property owner, as well the Workers’ Compensation claim. The general contractor and the crane operator subsequently settled the case out of court. They paid $2.1 million to the worker who suffered the loss of his arm and fingers, and $300,000 to the man who had the heart attack.
Then, the worker with the amputations filed a suit against the steel erection contractor. This time, the case went to trial. .
Why Adequate Commercial Liability Insurance Is Essential
During the trial, the injured worker’s lawyers argued persuasively that the steel contractor had failed to adhere to basic workplace safety rules. They claimed that the contractor had not:
- Hired a safe subcontractor
- Provided proper supervision of the crane’s operation
- Created a system for operating the crane safely
- Warned the injured men of the dangers they faced
- Provided proper training for their employees
- Provided appropriate tools.
In response, the defense attorneys argued that the crane operator was solely responsible for the accident, and that the steel erection contractor was not to blame.
The jury spent a little over six hours deliberating the case before finding in favor of the plaintiff and awarding him $3.6 million. Unfortunately for the contractor, his business liability insurance policy was for only $1 million.
The company is no longer in business.
Purchase the Maximum Amount of Liability Insurance You Can Afford
Workplace injuries are, unfortunately, all too common, and this case demonstrates why every business owner should purchase the maximum amount of liability insurance he can afford. Skimping on coverage may appear to be a cost-effective strategy in the short term, but the long-term consequences of failing to have adequate commercial liability insurance and a commercial umbrella policy can be devastating to your business.
At the same time, businesses need to verify that the liability insurance policy they purchase, regardless of the amount of coverage, applies to all of their business operations. A high insurance limit doesn’t protect the business if the policy excludes coverage for an activity the business performs all the time.
Commercial liability insurance is a big investment, but getting the right coverage is essential if you want to avoid an overwhelming financial loss. Don’t wait until it’s too late. Contact one of our business liability insurance experts at 516-292-3780 or request a free consultation today.