If you have a business and think you might need to buy business liability insurance, this post will explain everything you need to know about insurance for your company’s liability coverage.
A business liability insurance policy will protect a business and its owner in the event of a third-party claim or a formal lawsuit. Typically, your liability insurance will cover any expenses that are related to the legal defense of your business, along with any financial liabilities you might incur.
There are three different categories of insurance for business liability;
Next, we’ll explain a little more about the different types of liability insurance for businesses.
Professional liability coverage is often referred to in a number of different ways.
Whichever terminology applies, it will cover the same essential factors. It can help to protect business owners and companies who provide a service or offer professional advice from the cost of preparing a defense against a claim of negligence, and also where damages may be awarded as a result of a civil lawsuit.
Professional Liability Insurance Coverage is focussed on the alleged failure to perform on the part of the insured entity, any error or omission in either a service or product offered by the insured entity, or a financial loss insured as a result of the above. Typically, a general liability insurance policy would not cover these elements. There are different types of professional liability insurance to buy; this will usually depend on the profession of the insured entity.
Regardless of whether you make a product yourself, you should consider buying product liability insurance to give you coverage should someone lodge a claim against you due to injury or damage. A policy will usually cover any legal fees or compensation that you would be liable to pay.
If a product or a component causes any damage or injury to a person, then the distributor, manufacturer, retailer, and supplier could all become liable. Even if your company is simply a side-project, but you produce products of any kind, having product liability insurance in place can safeguard you should something go wrong. Here are a few practical examples of instances that would make you liable if something goes wrong.
You altered or repaired a product - If you restore, upgrade or repair a product and end up causing further damage to that product.
Your business name is on a product – This could apply to any branded items that you use for promotional reasons, as well as items that are bought.
The manufacturer of a product is no longer in business – If the company who originally made a product that you resell is no longer in business; any claim for compensation will be directed at you as the seller.
The manufacturer of a product is unknown – if you purchase products from a third-party supplier or you resell second-hand products; where the identity of a manufacturer cannot be found, the liability is then yours.
If you manufacture or sell products, then you will need to buy product liability insurance. If a product you sell damages a person’s property or causes an injury, then a claim could be made against you.
Commercial General Liability coverage, also known as CGL is a type of business liability insurance that will cover a company for personal injury, bodily injury, and any damage to a property that is caused by the company products or operations; or any injury that takes place within the company premises.
This type of general liability coverage is generally considered to be comprehensive business insurance, but it will not cover all risks that a company can face. For other liabilities, such as discrimination or sexual harassment; a policy that provides cover for employment practices liability may need to be purchased as additional cover.
A commercial general liability policy has several levels of cover available to choose from. Different business liability insurance companies will offer their own options. For instance, one policy might include business premises coverage as standard, whereas another company may offer this as an optional extra. Lots of business liability insurance companies will also provide you with an option to buy excess liability cover in order to cover any claim amounts that exceed the policy limitations.
The best business liability insurance companies will discuss your needs and demands in detail and select a policy that includes only what is necessary for your business.
A general liability insurance policy could cover expenses that are connected to non-employee injuries that occur at your business premises, libel, damage you might cause to another person’s property, and slander. It is designed to cover some of the most typical lawsuits that arise from general business activities and the costs of liability claims from third parties for personal injury, advertising injury, and third-party property damage.
If you need to buy insurance for your business, it’s easy to become overwhelmed by the different types of company insurance offered online. Comparing business insurance online is one way you can quickly and easily get a feel for the costs Vs. the different levels of coverage available.
Choose the right type of business insurance for your needs and the demands of your business, and always read the fine print to ensure you have a thorough understanding of the levels of business liability insurance you get with your policy, and the upper limits of the coverage as well.
Disclaimer: This information has been written for the public as informational only. Since coverage varies from state to state, it is important to speak to a licensed insurance agent in your state.