Idaho Liability Insurance

Liability insurance protects individuals and businesses from claims made by third parties. For Idaho producers, understanding liability coverages—especially CGL, workers' compensation, and professional liability—is essential for serving clients and passing the state exam.

Commercial General Liability (CGL)

The Commercial General Liability policy is the foundation of business liability protection.

CGL Coverage Structure

The CGL policy provides three main coverages:

Coverage A - Bodily Injury and Property Damage

Bodily Injury: Physical injury, sickness, or disease sustained by a person, including death.

Property Damage: Physical injury to tangible property, including loss of use.

Key Points:

• Covers legal defense costs (usually outside policy limits)
• Settlements and judgments
• Must result from an "occurrence" (accident)
• Subject to per-occurrence and general aggregate limits

Coverage B - Personal and Advertising Injury

Coverage C - Medical Payments

• No-fault medical coverage for injuries on premises
• Small limit (typically $5,000 - $10,000)
• Pays regardless of insured's liability
• Does not cover employees (workers' comp applies)

CGL Limits Structure

CGL Coverage Triggers

Occurrence-Based:

• Covers claims arising from occurrences during policy period
• Claim can be made later, coverage still applies
• Most common for CGL

Claims-Made:

• Covers claims made during policy period
• Occurrence must be after retroactive date
• More common for professional liability

Idaho Workers' Compensation

Coverage Requirements

Idaho has mandatory workers' compensation requirements:

Exam Tip: Idaho requires workers' compensation for employers with just ONE employee—more stringent than many states that require 3-5 employees. This is frequently tested.

Limited Exemptions

May Be Exempt:

• Sole proprietors and partners (for themselves)
• Officers of closely-held corporations (election to exclude)
• Some domestic employees
• Limited agricultural exemptions

Agricultural Exemption:

• Farm workers employed less than specified hours
• Specific seasonal limitations
• Must meet strict criteria

Workers' Compensation Benefits

Exclusive Remedy

Workers' compensation provides an exclusive remedy:

• Employees receive benefits without proving fault
• In exchange, employees cannot sue employer for negligence
• Exceptions for intentional harm or gross negligence
• Third-party lawsuits still possible

Idaho Industrial Commission

The Idaho Industrial Commission:

• Administers workers' compensation system
• Adjudicates disputed claims
• Regulates self-insurance programs
• Enforces compliance
• Maintains workers' compensation insurance database

Professional Liability Insurance

Errors and Omissions (E&O)

Professional liability insurance for non-medical professionals:

Who Needs E&O:

• Insurance agents and brokers
• Real estate agents
• Attorneys
• Accountants
• Architects and engineers
• Consultants
• Technology professionals

What It Covers:

• Negligence in professional services
• Errors and mistakes
• Failure to perform
• Misrepresentation
• Breach of duty

Medical Malpractice

Professional liability for healthcare providers:

• Physicians and surgeons
• Dentists
• Hospitals and clinics
• Nurses and allied health professionals
• Nursing homes

Claims-Made Coverage

Most professional liability uses claims-made coverage:

Key Features:

• Claim must be made during policy period
• Occurrence must be after retroactive date
• Extended reporting period ("tail") available
• Prior acts coverage important when switching carriers

Tail Coverage:

• Extends reporting period after policy ends
• Important when retiring or changing carriers
• Can be expensive (2-3 times annual premium)

Umbrella and Excess Liability

Umbrella Liability

What Umbrella Coverage Does:

• Provides additional limits over underlying insurance
• Drops down for claims not covered by underlying policies
• Broader coverage than underlying policies
• Self-insured retention (SIR) for dropped-down claims

Underlying Requirements:

• Minimum auto liability limits
• Minimum CGL limits
• Homeowners liability
• Other specified coverages

Excess Liability

How Excess Differs from Umbrella:

• Follows form of underlying policy exactly
• Only pays after underlying limits exhausted
• No drop-down coverage
• No broader coverage

Why Businesses Need Umbrella/Excess

Idaho Business Considerations:

• Large jury verdicts increasing
• Multiple underlying policies may exhaust quickly
• Protection against catastrophic claims
• Relatively affordable additional protection

Products Liability

Products Liability Exposures

Manufacturers, distributors, and sellers of products face liability for:

CGL Products-Completed Operations

CGL Coverage A includes Products-Completed Operations liability:

Products Hazard:

• Injuries from products after leaving your control
• Products manufactured, sold, or distributed by insured

Completed Operations Hazard:

• Injuries from work after it's completed
• Work done away from premises

Products Liability Considerations

For Idaho Businesses:

• Food producers and processors
• Agricultural equipment manufacturers
• Outdoor recreation equipment
• Consumer goods retailers
• Restaurants and food service

Commercial Auto Insurance

Business Auto Coverage

For vehicles used in business:

Symbol Coverage:

Hired and Non-Owned Auto

Hired Auto:

• Vehicles rented or leased for business use
• Rental cars for employees on business trips
• Coverage for liability and physical damage

Non-Owned Auto:

• Employee's personal vehicles used for business
• Liability coverage for business use
• Does not cover physical damage to employee's vehicle

Commercial Auto vs. Personal Auto

Employment Practices Liability (EPLI)

What EPLI Covers

Protection against employment-related claims:

EPLI Importance in Idaho

• All size employers face exposure
• Claims costly to defend even if unsubstantiated
• Small businesses often lack HR expertise
• Growing exposure area