Liability insurance will cover losses and damages to third parties as a result of a claim against your business. For example, if a suit is brought against your business for personal injuries or property damages, the cost of defending and resolution would be covered by your business’s Liability insurance. Normally, a general Liability policy will cover you and your business for most common risks, such as a customer or vendor being hurt on your premises, on a jobsite, or even in transit.
There are also other types of liability coverage available for business that is generally not covered in the standard general liability insurance policy. These include:
Errors and Omissions Insurance also known as “E & O Insurance” covers unintentional mistakes or failures which result in an injury to another party. The error must be unintentional and not malicious. For example, a realtor misdates a form or fills it out wrong causing an injury would normally be covered. Another example may be an insurance agent who files an application late.
Malpractice Insurance or Professional Liability Insurance will cover an injury to a third party when it is found that performance falls below the level of professional standard in a particular industry or profession. Malpractice Insurance will pay to defense costs and judgments. Malpractice insurance is available to Doctors, Dentists, Accountants, Architects and other professionals.
Automobile Insurance covers cars, trucks, vans and trailers used by your business. The coverage will reimburse damage to your vehicles subject to a deductible and also cover your drivers should they cause damage to another party.
Directors’ and Officers Liability Insurance is generally purchased by non-profit and corporations to cover its directors and officers against law suits brought against the company.
Finally, we are left with Workers’ Compensation insurance. This does contain liability coverage within the scope being protected against claims.
Workers’ Compensation insurance covers you and your business for the on the job injury to an employee. Most states require a business to carry workers’ compensation insurance. This policy also generally protects your company having a negligence suit against your company as a result of an on the job injury.
Obviously, careful review of your business and industry as well as a commercial insurance agent will help you in determining what liability coverage choices are right for your business.