There’s always a chance that your commercial actions might harm someone else. Someone could slip and fall in your store. One of your company drivers might cause an at-fault vehicle accident. You might terminate an employee who then sues you and claims discrimination.
In each of these situations, your actions might harm someone else. Therefore, you might have a responsibility to compensate them for their losses. So, how do you do that? Businesses should be able to turn to liability insurance when the unexpected strikes.
Why do businesses need liability insurance?
Liability insurance helps protect businesses if their actions cause harm to someone else. If the liability policyholder owes money due to the damage, they might not have to pay much little out of pocket. A successful policy claim can help them cover the damage expenses they might face.
It makes sense that businesses should carry liability insurance. Should its actions harm clients, employees or vendors, they might owe them money. Paying damage costs, legal fees or other funds from the company might sink the business. Liability coverage can help ensure a business doesn’t suffer because of an accident.
The Various Types of Commercial Liability Coverage
You likely know that your business needs liability insurance. But, what type of liability protection do you need. A simple answer is more than one.
Various forms of liability coverage can work together to help commercial interests. Often, businesses invest in several different types of protection. The outline below lists just a few of these policies. Depending on your business structure and services, you might need some, all or even more of them.
- Personal injury liability: Injury risks exist on your business property. Someone could slam their fingers in a sliding door. They could slip on a staircase and twist their ankles. Almost anything could cause someone to get hurt in the right conditions. If someone does get hurt while doing business with you, they might expect you to pay for their medical bills, lost income or other costs. Personal injury liability protection might help you meet a variety of their needs.
- Workers’ compensation: Employees also face injury risks in the course of their work. For example, a team member might burn themselves in the break room while getting coffee. Someone else might injure themselves while working with a piece of machinery. Regardless of if the accident was the business’ fault, they might have to provide workers’ comp. It’s often the law. It can help employees still receive income if they have to take time off work to recover.
- Property damage liability: If you damage someone else’s property, they might expect you to pay for it. For example, a repairman might visit a client’s home. They might accidentally break the client’s window when carrying their equipment inside. Even if it was an accident, it was still likely the company’s fault. This coverage might help you compensate the customer.
- Commercial auto insurance: Most drivers, by law, have to carry minimum liability insurance. This is the same for company drivers. If your company owns vehicles and uses them for business, you’ll need liability insurance. It will help the company pay for damage if it is an at-fault party in an accident that harms someone else.
- Errors & omissions coverage: If you provide professional services, you might accidentally give customers advice or information that proves harmful. Use this coverage to help make up for mistakes you make.
- Product liability coverage: You want to make the best products on the market. But, any item might break and harm someone else. If the harmed party holds you responsible for a malfunction, you might be able to use this coverage.
- Cyber liability insurance: You probably store a lot of sensitive information on computers. If you lose that data, or if it gets stolen, this might inconvenience your customers. It might even pose an identity theft risk. This coverage can help you recover in cases where sensitive data becomes exposes.
- Directors and officers coverage: Many companies operate with high-level managers or boards. If these people make mistakes, their actions could harm the company. This coverage offers specified liability coverage for their damage risks.
- Employment practices (EPLI) insurance: Hiring, training and retaining talent might lead to mistakes. Companies often have to follow legal guidelines to do so. This type of protection can help you if an employee (current, former or prospective) alleges unfair treatment. They might sue you for discrimination, harassment, unfair termination or other problems prohibited by employment law. You might need this coverage to cover legal costs and settlements.
Protecting your business requires attention to detail and a commitment to ethical practice. However, liability insurance can help. Some of this coverage might come in packages, while you must buy others separately. For help getting the right liability insurance, talk to your commercial insurance agent at 816.282.0224. They can likely help you decide which of these policies you might need.
Also Read: Making Your Business Safe from General Liability Risks