Liability Insurance For Small Businesses

assurance rc is designed to protect your business from third-party claims. Claims include bodily injury, property damage, copyright infringement and reputational harm.

Liability coverage is required by most states for car owners and can also be purchased for home or business. It is often a part of commercial multi-peril policies. It can be offered as a single limit or split limits such as $50,000/$100,000.

General liability

The risk of a costly liability claim is a real possibility for any small business. In the event someone slips and falls in your store or a project mishap damages your client’s property, you could be sued for compensation – unless you have general liability insurance to pay the bills.

Also known as commercial general liability (CGL) insurance, it protects your business from financial loss should you be held liable for a third-party’s personal or advertising injury caused by the normal operations of your business. In addition, it typically covers the reasonable cost of defending against such lawsuits including attorney fees and court costs.

General liability is often included in a bundle of policies called a business owners policy (BOP). It can also be purchased individually to meet the specific coverage requirements of certain customers or to satisfy certain government-imposed obligations. For example, some states require proof of general liability before they will issue a business license.

Auto liability

The liability portion of car insurance helps cover other parties’ expenses when you’re at fault in a collision. Most states require a minimum amount of liability coverage to drive legally, but you can get even more protection with higher limits.

Bodily injury liability pays for another driver’s medical expenses, up to your policy’s limit, after an accident that you cause. Some policies also include personal injury protection, which pays for your medical expenses and those of anyone in your car, regardless of who was at fault.

Property damage liability covers the cost to repair or replace another person’s vehicle and other property in an accident that you cause. It may also pay for legal fees if the other party sues you. Most policies include a property damage limit per person and a total limit per accident. Higher limits will increase your premiums, but they may save you from paying out-of-pocket expenses in the event of an accident.

Workers’ compensation

The purpose of workers’ compensation is to cover medical costs and a portion of lost wages when an employee gets hurt at work. Typically, it also protects the business from lawsuits related to workplace injuries. It’s required in most states for businesses with employees, including sole proprietorships and partnerships.

Insurers rely on standardized data coding systems to collect information about claims. This includes the nature of the injury/illness, how it occurred, cost of medical care, cost of partial wage replacement and other factors.

Employers with a large number of workers’ comp claims pay higher premiums than those with few or no claims. This is because insurers must set rates based on the expected cost of losses for each class of risk. Premiums may be adjusted up or down depending on the company’s experience, location and other factors. It is possible to reduce workers’ compensation rates by implementing safety programs and controls. Insurance fraud is also a concern; some people may report false injuries or exaggerate the severity of an illness.

Commercial liability

Commercial general liability, or CGL, safeguards your business from the economic fallout of common incidents that can happen while running a company. These include bodily injury (a customer trips over a rug in your office), property damage (an employee accidentally spills paint on merchandise at a client’s retail store), and personal and advertising injury (libel, slander, or copyright infringement).

CGL policies typically cover the cost of defending lawsuits against insured damages and can provide payment for those damages if they are found to be valid. You can also add endorsements to your policy for things like errors and omissions insurance, employment practices liability, and excess liability.

Depending on the type of business you run, you may need to add other companies or individuals as “additional insureds” on your commercial liability policy. This is especially important when you enter into contracts with other businesses or individuals. In these cases, it’s likely that the other party will want to be named as a defendant in case of an accident or incident occurring that is your fault.

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