When you have a business, you’re going to need liability insurance. It’s just something that comes with the territory of being a business owner. And it’s not just because you’re liable for things that happen in your business. It’s also because you want to protect yourself from lawsuits that come out of nowhere if someone has an accident on your property or slips and falls in your store.
Liability insurance can cover all kinds of things, from medical bills to legal fees—it depends on what kind of plan you get. But no matter your plan, liability insurance is essential to any small business owner who wants to keep their doors open! Check out excess vs umbrella.
Here are some of the different types of liability insurance policies and how they work:
General liability is the most common type of insurance and covers you if someone gets hurt or your business damages their property. If you’re a business owner, you should have general liability insurance.
General liability is important if your business has employees or contractors because it protects you against lawsuits brought by injured workers or customers. If an employee slips and falls on your property, breaks his arm, and decides to sue you, your general liability policy will pay for his medical bills.
General liability policies also protect you against lawsuits brought by visitors to your business, such as restaurant patrons or office building visitors. In addition to paying for injuries suffered by visitors and workers, general liability also covers damage done by customers to other people’s property (for example, if someone spills coffee on someone else’s shirt).
General liability policies generally cover three types of claims: bodily injury, property damage, and personal injury (which includes emotional distress).
Professional liability insurance is a type of commercial insurance that protects you from lawsuits filed against you by your clients, customers, partners, and vendors. Professional liability insurance protects against claims involving negligent acts a professional commits in their line of work.
The following are some examples of how professional liability coverage can help protect you:
- If a client has an accident caused by poor design or construction of a building you designed, you may be liable for damages under the law.
- If an employee injures another person while on the job, the injured person can sue his employer (you) and win damages.
- If someone sues you because they believe the products or services you provided were defective, they may be awarded monetary damages if they win their case against you.
Employer liability insurance protects you from being liable for the actions of your employees. This type of coverage may be required by law, such as in some states where employers must carry workers’ compensation insurance.
Employer liability insurance covers claims made by current and former employees due to injuries or illnesses they suffered. The policy can also cover claims made against you by customers if an employee steals something or causes damage while working at a customer’s location. Employer liability insurance typically covers bodily injury, property damage, medical payments, and legal defense costs associated with these claims.
- The cost of employer liability insurance is based on factors such as:
- The size and type of business (for example, a construction company).
- The number of employees you have
- The industry you’re in (for example, retail).
- Policy type (excess vs umbrella)