If you retire, did you know that you can still be sued if you sold a defective product or performed faulty work and someone or their property is injured or damaged because of it?  If you don’t renew your liability insurance when you retire, what are you to do?

The coverage under the CGL policies you have purchased for years is triggered by an “occurrence.”  This concept is one of the most misunderstood in liability insurance.  It is true that an “occurrence” policy could provide coverage for accidents that happen well after the policy has been in force.  However, the agreement in the policy says that for insurance to apply, the bodily injury or property damage must occur during the policy period.

Consider the example of a contractor who has retired to the sun and is surprised to receive a call from a familiar voice from the past.  It’s his insurance agent, informing him that a deck he installed on a home two years ago collapsed during a party.  A claim is being filed against him for the injuries and damage to the home resulting from the accident.  In this case, the “occurrence” happened after the expiration date of the CGL policy.

For anyone who had a business that provided products or services, liability can follow you forever.  To address the risk of the unknown, insurance companies have developed insurance called discontinued operations liability.  This policy will continue to provide liability insurance to you even after your interest in a business ceases.

Call or email your NAUGHT-NAUGHT AGENCY representative for more information on this insurance coverage.

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