Nevada Commercial Liability Insurance

Nevada businesses face significant liability exposures requiring comprehensive commercial insurance coverage.

Commercial General Liability (CGL) Policy

Coverage Overview

Commercial General Liability provides broad coverage for business liability:

What CGL Covers:

• Bodily injury to others on business premises or from business operations
• Property damage to others' property caused by business
• Personal and advertising injury (libel, slander, copyright infringement)
• Medical payments for minor injuries (no fault required)
• Legal defense costs (covered in addition to limits)

What CGL Does NOT Cover:

• Professional errors (need professional liability/E&O)
• Employee injuries (need workers' compensation)
• Auto liability (need commercial auto policy)
• Intentional acts
• Pollution (need separate pollution liability)
• Cyber liability (need cyber insurance)

CGL Coverage Structure

Coverage A - Bodily Injury & Property Damage:

• Occurrence-based coverage
• Per occurrence limit (typical: $1,000,000)
• General aggregate limit (typical: $2,000,000)
• Products-completed operations aggregate

Coverage B - Personal & Advertising Injury:

• Slander, libel, defamation
• Copyright, trademark, trade dress infringement
• Wrongful eviction
• False arrest, detention, imprisonment
• Separate aggregate limit

Coverage C - Medical Payments:

• Small medical expenses ($5,000-$10,000 typical)
• No fault required (goodwill coverage)
• Immediate payment for minor injuries
• Per person limit

Exam Tip: CGL provides "occurrence" based coverage, meaning it covers claims that occur during the policy period regardless of when the claim is filed. This differs from "claims-made" professional liability policies.

Nevada Business Exposures

Las Vegas Hospitality Industry:

• Casinos and resorts
• Restaurants and nightclubs
• Entertainment venues
• High customer volume = increased liability

Construction Industry:

• Nevada has strong construction market
• Construction defect claims common
• Completed operations exposure
• Subcontractor liability

Retail and Service Businesses:

• Slip and fall claims
• Product liability
• Customer injury claims
• Premises liability

Workers' Compensation Insurance

Nevada Workers' Comp Requirements

Mandatory Coverage:

• Required for ALL employers with employees
• Even one employee requires coverage
• Includes part-time and seasonal workers
• Corporate officers can opt out (must file exemption)

Exempt from Requirement:

• Sole proprietors with no employees
• Partnerships with no employees
• Independent contractors (properly classified)
• Casual employees (limited exceptions)

What Workers' Comp Covers

Benefits Provided:

• Medical expenses: All necessary medical treatment
• Disability benefits: Wage replacement during recovery
• Vocational rehabilitation: Retraining if cannot return to same work
• Death benefits: Payments to surviving dependents
• Funeral expenses: Coverage up to statutory limit

Disability Categories:

• Temporary Total Disability (TTD): Cannot work during recovery
• Permanent Partial Disability (PPD): Partial permanent impairment
• Permanent Total Disability (PTD): Permanently unable to work
• Temporary Partial Disability (TPD): Can work light duty during recovery

Exclusive Remedy Doctrine

Key Principle:

• Workers' comp is employee's EXCLUSIVE remedy
• Employee cannot sue employer for workplace injury
• Exceptions: Intentional acts, intoxication of employer
• Trade-off: Guaranteed benefits without proving fault

Benefits:

• For Employees: Guaranteed benefits, faster payment, no need to prove fault
• For Employers: Protection from lawsuits, predictable costs, legal defense included

Exam Tip: Workers' compensation is the EXCLUSIVE remedy for workplace injuries—employees cannot sue their employer except in rare cases of intentional harm. This is called the exclusive remedy doctrine.

Nevada Workers' Comp System

Administration:

• Regulated by Nevada Division of Industrial Relations
• Two options for employers:
  1. Private insurance: Purchase from licensed insurers
  2. Self-insurance: Large employers can self-insure (with approval)

Penalties for Non-Compliance:

• Fines up to $2,000 per employee
• Stop-work orders
• Personal liability for benefits
• Criminal penalties possible
• Inability to enforce contracts

Business Owners Policy (BOP)

BOP Structure

Combines:

• Commercial property coverage
• Commercial liability coverage
• Business interruption coverage
• Package discount pricing

Target Market:

• Small to medium businesses
• Office buildings, retail stores, restaurants
• Service businesses
• Businesses with lower risk profiles

Typical Eligible Businesses:

• Retail stores (under certain square footage)
• Office buildings (under certain square footage)
• Restaurants (limited cooking)
• Apartments (under certain number of units)
• Service businesses (contractors, consultants)

Ineligible Businesses:

• Auto repair and service stations
• Bars and nightclubs
• Financial institutions
• Contractors (some types)
• High-hazard operations

BOP Coverage Components

Property Coverage:

• Building (if owned)
• Business personal property
• Loss of income/business interruption
• Extra expense
• Typically replacement cost basis

Liability Coverage:

• Bodily injury and property damage
• Medical expenses
• Personal and advertising injury
• Damage to premises rented to you
• Fire legal liability

Additional Coverages (included):

• Glass breakage
• Sign coverage
• Fire department service charge
• Electronic data loss (limited)
• Outdoor property
• Money and securities (limited)

Exam Tip: A BOP (Business Owners Policy) packages property and liability coverage for eligible small to medium businesses. It's more economical than separate policies but has eligibility restrictions.

Professional Liability (Errors & Omissions)

E&O Insurance Overview

Covers:

• Professional negligence claims
• Errors in professional services
• Omissions (failure to perform)
• Misrepresentation claims
• Breach of duty claims

Who Needs E&O:

• Insurance producers and brokers
• Real estate professionals
• Accountants and CPAs
• Lawyers and attorneys
• Consultants
• Engineers and architects
• Medical professionals (medical malpractice version)
• Technology professionals

Nevada Producer E&O

Why Producers Need E&O:

• Mistakes in coverage recommendations
• Failure to obtain requested coverage
• Policy service errors
• Misrepresentation of coverage
• Missed renewals or expirations

E&O vs. CGL:

Claims-Made vs. Occurrence

Claims-Made (E&O typical):

• Claim must be made during policy period
• Covers only claims reported while policy active
• Retroactive date establishes prior acts coverage
• Extended reporting period (tail) needed when changing insurers

Occurrence (CGL typical):

• Covers injuries/damage that occur during policy period
• Claim can be filed years later
• No tail coverage needed
• More predictable coverage

Exam Tip: Most professional liability (E&O) policies are CLAIMS-MADE, meaning the claim must be made during the policy period. CGL policies are OCCURRENCE-based. This distinction is frequently tested.

Nevada-Specific Liability Considerations

Liquor Liability (Dram Shop)

Nevada Dram Shop Law:

• Nevada law is MORE restrictive than many states
• Generally protects alcohol servers from liability
• Limited liability for serving intoxicated persons
• Exception: Serving to obviously intoxicated person who then causes injury

Who Needs Liquor Liability:

• Bars and nightclubs
• Restaurants serving alcohol
• Casinos (significant exposure)
• Event venues with bars
• Catering companies serving alcohol

Coverage:

• Separate liquor liability policy or endorsement
• Not covered under standard CGL (excluded)
• Defense costs and settlements
• Often expensive in Nevada (Las Vegas)

Casino and Gaming Liability

Unique Exposures:

• Large number of customers
• Alcohol service (24-hour in many cases)
• Entertainment venues
• High-value property
• Premises liability
• Assault and battery
• Parking lot liability

Required Coverages:

• Commercial general liability (high limits)
• Liquor liability
• Workers' compensation
• Commercial auto (valet services)
• Crime/fidelity coverage
• Cyber liability (customer data)

Construction Defect Liability

Nevada Construction Defect Climate:

• Significant construction defect litigation historically
• Reforms enacted to address "construction defect crisis"
• Completed operations exposure significant
• Long tail liability (claims years after completion)

Coverage Considerations:

• Products-completed operations coverage essential
• High aggregate limits needed
• Subcontractor insurance requirements
• Additional insured endorsements
• Contractual liability coverage

Exam Tip: Nevada's hospitality and gaming industry creates unique liability exposures not found in most other states. Liquor liability, casino exposures, and high customer volumes increase risk.

Additional Commercial Liability Coverages

Commercial Auto Liability

Coverage:

• Bodily injury and property damage
• Similar to personal auto but higher limits
• Covers owned, hired, and non-owned vehicles
• Employee use of personal vehicles (non-owned coverage)

Who Needs:

• Any business using vehicles
• Delivery services
• Contractors
• Service businesses
• Companies with employee travel

Umbrella/Excess Liability

Purpose:

• Provides additional limits above underlying policies
• Typically $1 million to $10 million
• Broader coverage than underlying in some cases
• Fills gaps in underlying coverage

Underlying Requirements:

• CGL policy with minimum limits (typically $1M per occurrence)
• Commercial auto with minimum limits (typically $1M combined single limit)
• Employers liability (part of workers' comp, typically $1M)

Cyber Liability Insurance

Growing Nevada Exposure:

• Data breach notification laws
• Credit card information theft
• Ransomware attacks
• Business interruption from cyber events

Coverage:

• First-party: Business's own losses
• Third-party: Liability to others
• Crisis management and PR
• Regulatory fines and penalties
• Credit monitoring for affected customers