A business owner needs liability insurance to protect them from the legal liabilities that could result from a lawsuit. It also helps them recoup expenses when the policyholder is found liable for property damage or bodily injury.
General liability insurance is a common coverage type available from almost every commercial insurer. Limits can be set on both a per-occurrence and aggregate basis.
Auto Liability Insurance
Auto liability insurance is one of the most important parts of a car insurance policy. Liability Insurance Agency pays for other drivers’ medical expenses and property damage if you’re at fault in an accident.
Every state requires that drivers have some degree of liability coverage. Liability insurance is broken into bodily injury liability (BI) and property damage liability (PD).
The BI portion of your liability insurance pays for expenses related to injuries that you cause in a car accident, such as medical bills and lost wages. It also covers funeral expenses, pain and suffering, and other connected costs up to the limits you select.
PD coverage pays for the cost of repairing or replacing a vehicle or other property damaged in an accident, such as a fence, utility pole or building. It can also cover other items in the vehicle or property, such as a laptop computer.
It’s smart to buy higher levels of liability than your state’s minimum requirements. Lower liability limits are less expensive, but they can be exhausted more quickly and leave you with out-of-pocket expenses if you’re in an accident.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects you against lawsuits and claims filed against you by your clients. These include claims made due to mistakes you’ve made, malpractice issues, and misrepresentations of your products or services.
The costs of this type of coverage vary by business. It’s important to discuss with your broker the best way to protect your business against these potential claims.
You’ll need to make sure that you have the correct limits and deductibles in place to cover any losses that may arise from these incidents. You may be able to combine this coverage with general liability for better protection.
Policies often differ dramatically in wording, so it’s essential to talk with an attorney familiar with professional liability insurance before purchasing a policy. For example, some providers offer coverage for a “negligent act, error or omission” and others don’t.
Employers’ Liability Insurance
If an employee sues your business because they suffered a work-related injury or illness, this type of insurance will cover the costs of defending you in that lawsuit.
Workers’ compensation coverage, on the other hand, only covers medical expenses and lost wages when a worker suffers a workplace injury or illness. If the injured employee decides to sue for more damages than those covered by workers’ compensation, employers’ liability insurance will pay for those defense costs and any judgments or settlements you win in that suit.
In some monopolistic states, such as North Dakota, Ohio, Washington and Wyoming, employers’ liability coverage is not included in workers’ comp policies, so they must purchase it directly from a state fund set up for this purpose. Fortunately, this gap can be avoided by purchasing an Employers’ Liability Stop Gap Endorsement to your workers’ comp policy. This can help prevent a double recovery situation where employees are able to collect workers’ compensation benefits and then also file a lawsuit against their employer for the same injuries or occupational diseases.
General Liability Insurance
General liability insurance, also called commercial general liability or CGL, protects your business from the costs of third-party claims involving bodily injury and property damage. It also provides coverage for a variety of other legal risks, including libel, slander, invasion of privacy and copyright infringement.
While general liability doesn’t cover every claim that might arise, it’s a smart start to protecting your business. For additional protection, you can purchase Errors and Omissions (E&O) or Professional Liability insurance.
Costs for general liability vary based on the type of business, its location and how much insurance you need. A Business Owner’s Policy can be a convenient and cost-effective way to combine general liability with other coverages.