Truth About Liability Insurance
Liability insurance is a general name for any insurance coverage purchased by businesses and individuals for protection against lawsuits in situations of malpractice, injury or negligence. This insurance is vital for business owners and people who own property. Being sued by someone who is injured or who sustains property damage while on your premises, or in your care, can cause financial ruin for you.
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Business
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General business, product and commercial property liability are common business insurance products, according to the U.S. Small Business Administration. General liability is a broad policy that covers legal hassles for business owners that result from accidents, injuries and negligence. Product liability is common to manufacturers and others in the distribution channel that distribute products. It protects against lawsuits from injuries caused by your product. Commercial property liability covers third-party injury or damage caused on your business property.
Professional
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Professional liability insurance, often known as errors and omissions insurance, is a specific type of business insurance that covers service providers. Any business owner or independent worker who delivers services should carry this protection. It covers you for malpractice, errors, and negligence during the delivery of your services. In some states, certain professionals are required to carry professional insurance. The Small Business Administration notes that physicians are required in most states to have professional insurance protection.
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Home
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Liability protection is a common component in a broad homeowners insurance policy. Your home insurance liability benefits typically cover you for lawsuits that result from someone being injured or experience property damage while on your property. Medical payments to others is another common feature of a home insurance policy. This component covers medical payments that you are required to pay to cover the expenses of someone injured on your property.
Additional Insights
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Businesses can often bundle general liability insurance with property protection in a policy known as a Business Owners Policy. However, liability protection is typically modest in these bundled solutions, so if you need higher liability coverage, you are better off with a separate policy. Two basic factors contribute to the level of business liability insurance you need. One is the perceived risk based on the nature of your business. Another factor is the history of damage rewards in your state. If high damage awards are common, you might want higher coverage.
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References
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