Risk management can reduce the chances that your business will be sued, but it can’t eliminate them, and that’s why you need liability insurance. It pays the cost of your defense and protects your assets if you are sued. How much coverage you need depends on the risk associated with your business. Here are some more things you should know.
A Commercial General Liability (CGL) policy protects your business from financial loss if you’re liable for certain damages caused by your services, business operations, employees, or non-professional negligent acts. A CGL policy will usually cover the costs of your legal defense and pay all damages if you’re found liable, up to the limits of your policy. CGL includes:
Additional liability coverage, not part of commercial general liability insurance, to consider include:
Professional liability insurance, also known as errors and omissions insurance or malpractice insurance, pays the cost of your defense and any damages awarded, up to policy limits if you provide any type of advice, expertise, or professional service, and are sued by a customer, client, or other parties who claims they were injured due to your negligent act, error, omission, or malpractice. The amount of coverage you’ll need and how much it’ll cost depends on the size and level of risk of your business. Claims covered by professional liability insurance include negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. A claims-made policy must be in effect when the event took place and when a lawsuit is filed. An occurrence policy covers any claim for an event that happened during the period of coverage, even if the suit is filed after the policy lapses. Coverage usually doesn’t extend to non-financial losses or losses caused by intentional or dishonest acts.
If you’re ready to purchase liability insurance for your business or have questions about the coverage you need we’re ready to help!