How to Limit a Corporation's Liability With Property and Liability Insurance

Insurance providers often bundle property and liability insurance into a business owner's policy (BOP) that can help limit your corporation's liability. Liability insurance covers your business in the event that your product or service causes injury, while property insurance covers your business's physical area and equipment. This insurance covers lawsuit costs, the cost of work stoppage due to damaged facilities and the cost of treating anyone who suffers an injury on your company's premises. Follow these steps to obtain it.

Things You'll Need

• Phone
• Computer with Internet access

Instructions

Learn about Property and Liability Insurance

1. Learn the limitations of property and liability insurance. This type of insurance does not cover workers' compensation, health insurance, life insurance, extended periods of work stoppage or lawsuit costs that arise from errors or omissions your business has made.

2. Address as many risks as possible before applying for property and liability insurance to reduce the cost of your premium. For example, you may want to install or upgrade your surveillance and security systems, fire alarm and sprinkler systems and your power backup or generator system.

3. Search for a provider through an organization such as the National Association of Professional Insurance Agents (see Resources below).

Get Property and Liability Insurance

1. Ask for provider recommendations from businesses of a similar size in your industry. When you have a few names, speak with an agent at each provider and get a quote based on the size of your business and total amount of assets you'd need covered.

2. Ask to speak with current clients of each insurance provider you consider. Ask these clients how the insurance agency responds to claims, whether agents are available 24/7 and how willing agents are to make changes to an existing policy.

3. Verify that the agent you choose has professional accreditation, such as a CPCU (Certified Property and Casualty Underwriter) or CIC (Certified Insurance Counselor) designation.

4. Select the provider who offers a combination of excellent customer service, high coverage amounts and moderately-priced premiums.

5. Limit your corporation's liability by keeping copies of your insurance policy on-site. Review them on a yearly basis and compare them with the current business plan. If you've expanded operations, make sure your policies cover the new scope of operations.

6. Liability insurance does not protect you if there are circumstances of nonperformance under a contract. For that, you will need to speak to your agent about a supplementary errors and omissions insurance policy.

Tips & Warnings

• Many major insurance firms such as Hartford, Wells Fargo and Bank of America offer BOP packages.

• Look for a property insurance policy that covers not only your corporation's equipment, furniture and other items owned by your company, but also offers a specified allowance to use during rebuilding should your work facility be damaged or destroyed.

• Once you decide on a provider and submit your application, expect the underwriting process to take 5 to 7 business days.

• You will need to accurately report your company's assets when applying for insurance. Overvaluing them can result in a high premium, while undervaluing won't provide enough coverage.

• You may need other insurance policies to limit your company's liability. For example, if your company uses vehicles to transport goods, you will need a comprehensive auto liability policy as well.

• Insurance fraud is a crime punishable by federal law.