You never want a customer to experience a problem with your business services. However, there is no guarantee that they won’t. And, if someone experiences a problem in the business, then they might blame you for the problem. That’s why you likely need liability insurance. It’s there to help you when third-party accidents occur. While most of the time, you will benefit from the foundation of a general liability insurance policy, that is not all the coverage you need. Most businesses need numerous liability policies to augment their general coverage. Here’s a little more information on why that is so.
Understanding Business Liabilities
Businesses provide services, and that means a lot of interactions with other parties, namely individual customers and other businesses. However, in every interaction, there is a chance that mistakes might occur. Should you cause a problem for one of your clients, they could experience both physical and financial losses. Therefore, because of your mistakes, the customer might hold you responsible, and they might want you to pay for the damage.
That’s where liability insurance comes in to play. This is a policy that pays for third-party losses in case a business policyholder makes mistakes. Therefore, coverage is not only a benefit for your business itself, it’s also there to protect your customers and corporate reputation.
What’s a General Liability Policy?
Nearly every business, everywhere, needs liability insurance. However, there are numerous types of liabilities within any given industry and storefront. Therefore, where most businesses start their liability policies is with a Commercial General Liability (CGL) policy.
This is the most-common type of liability insurance that will apply to the liabilities that nearly every business faces. Policies usually contain:
· Property damage coverage: Should you damage a client’s belongings, either in your care or on their own property, then this coverage will pay for the costs of damage. Usually, policies will pay for repairs or replacements.
· Bodily injury coverage: Someone might get hurt in your business. For example, a client might slip and fall on your restaurant floor, and their injuries costs might become your responsibility to pay. That’s where this coverage can jump in to help you out.
· Legal assistance: Sometimes, a dissatisfied party might sue you for their losses. Even if the accident was no fault of yours, that doesn’t mean lawsuits won’t arise. Policies usually will make arrangements to cover your legal costs in case you have to go to court.
· Accidental medical payments coverage: Sometimes, when a person’s injuries are no fault of yours, you can use this coverage to compensate them nonetheless. Coverage might even help you avoid a lawsuit in some cases.
In many cases, you can receive your general liability policy as part of a Business Owners Policy, or BOP. In other cases, you might need to buy it separately, depending on the types and amounts of coverage for which your qualify.
However, the more-important factor to realize is that sometimes, the basic general liability policy won’t apply to all the mistakes you might make that harm others. That’s why you might need additional liability policies. What do you need to do to get these policies?
Expanding Your General Liability Policy
There is a very wide world of liability insurance out there. Sometimes, you can add extra coverage directly to your general liability policy. In other cases, you must get supplementary policies for your portfolio separately. However, the point is that you get as much coverage as will keep you as protected as possible. A few to consider are:
· Errors & omissions (E&O) coverage: Your policy will pay when your clerical mistakes or professional advices causes financial harm to clients.
· Employment practices liability insurance (EPLI): During hiring, termination and retention practices, your employees might allege discrimination, harassment and related misconduct on the part of the company. This coverage will help you settle with the client, or even cover your legal fees in case claims are unfounded.
· Cyber liability coverage: Losses or breaches in your computer data systems could lose sensitive third-party information, or even put those parties at-risk of privacy breaches or identity theft. Coverage will help you pay for the costs of compensating clients.
· Products liability insurance: In case one of your manufactured projects causes harm to someone else, this coverage will pay for their losses.
· Products-completed coverage: If you do a project for a client, and the project later fails or causes other harm, then it is this coverage that might pay for your losses.
· Advertising injury coverage: Mistakes in promotional materials might cause harm to competitors or others. This coverage will compensate them.
· Personal injury coverage: This coverage will pay others, clients and competitors included, in case you face allegations of libel or slander.
· Contractual liability coverage: When you enter a contract with your clients, you want to guarantee them you’ll do the project right, and without causing problems. This coverage will help you in case of project failures.
The way to ensure you get the right liability coverage is to talk to your Remco Insurance agent. We are more than happy to help you understand your industry risks, and where the appropriate liability coverage might apply.