All businesses face risks. No matter how careful you are, a customer could slip and fall on your property; one of your employees could be injured while on the job; or, you might accidently use a copyrighted photo in your advertisement. We live in a litigious society and a single lawsuit can have the potential to cripple your company and deplete your savings – which is why liability insurance is an essential part of any business insurance plan.
Here is a primer on the different kinds of commercial liability insurance available and how they can protect you and your business.
All businesses need liability insurance, but depending on the kind of business you operate, here are some specific types of liability coverage you may want to discuss with your insurance representative:
A general liability policy protects your business from the risk of being sued and/or held legally liable for things such as malpractice, injury or negligence. Liability can arise from your business activities (premises or work-away) or the products you manufacture, sell or distribute. In today’s uncertain world, your liability risk today might differ from what it has been in the past, so it’s important to have a general liability policy in place that will evolve with you, covering new exposures as they are introduced.
Being a company director or officer makes you vulnerable to allegations of wrongful acts in the course of doing your job. Directors & Officers Liability insurance protects you from claims made against you by a host of third parties – from shareholders to customers. It lets you focus on running the company instead of worrying over protracted litigation.
If your business provides a service to others, you may need professional liability insurance, also known as Errors & Omissions (E&O) insurance. Professional service firms, media organisations, public entities, consultants and recruitment firms are just a few types of businesses that are constantly at risk of being sued over the services they perform and the information they disseminate. A professional liability policy can provide protection, even if the lawsuit is without merit.
To learn more about professional liability, see What Is Professional Liability Insurance?
If you have employees, you may be required to purchase a work injury compensation policy, which is a type of employer liability insurance. Work injury compensation policies provide coverage if an employee is injured or gets sick because of their job. It can pay for medical care and help protect your business from lawsuits due to work injuries or illnesses.
Every business is different and has its own unique liability risks so it’s always important to review your coverage options with your agent or broker.
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