Business Insurance Liability

Any business operating in the United States today without liability insurance is taking a risk everyday in being closed down forever and possibly causing the personal ruin of the owner. Every day, businesses face liability issues, whether they are from customers, employees, or the general public. The first way to protect a business from liability is with what is called commercial general liability (CGL) insurance. This is one of the most basic forms of insurance for businesses, along with property insurance. It protects the business and the owner against damages that may occur to others or others’ property wherever the company is conducting their business.

Business insurance for liability covers claims in four major categories:

• Property damage
• Bodily injury
• Personal injury
• Advertising injury

In most cases, the insurance covers both the claims and any associated costs in defending against such claims or settling them out of court. This can be invaluable when the claims are fraudulent. Otherwise, a business could go bankrupt by defending itself against something for which it is not responsible. Some of the most common forms of coverage for CGL insurance are as follows:

• Personal and advertising injury – This coverage is for slander, libel, or other personal offenses that may be committed during the course of business or advertising the business.
• Employment practices liability – This coverage is for lawsuits that may occur from employees or applicants. It includes defense costs.
• Medical expenses – If anyone is accidentally or negligently injured where the business operates, this coverage pays the medical costs.
• Premises and operations liability – This type of coverage is to pay the costs of any property damage or bodily injury occurring as the result of business operations.
• Defense costs – Legal costs are covered on some liability claims, even if the business is not at fault.
• Tenant’s liability – This coverage is for those who are renting their place of business. It protects the owner of the building or land.

Business owners should be aware, however, there are limits as to what is covered under business insurance liability. Many business owners combine CGL insurance with property insurance to increase their coverage. Combining the two types also offers more affordable premiums than purchasing them separately.

Another type of insurance often combined with CGL insurance is professional liability insurance, also known as errors and omissions (E&O) insurance. This type of insurance protects the business from clients’ claims of negligent acts, errors, or omissions in the services performed by the business. This is especially important if the business makes professional recommendations to clients.

An additional type of business liability insurance is product liability insurance. This protects the business should a product they manufacture cause harm to another person or in some way damage or destroy another person’s property. The amount of coverage a business needs depends on the type of products they manufacture. For instance, auto makers will need much higher coverage than a company manufacturing paper towels.

Many sellers of liability insurance for businesses have predetermined packages made to meet the needs of a particular type of business. Some examples are accountant’s liability, dentist’s liability, and technology services E&O liability.