Liability insurance protects your company in case it is sued or held legally liable for injury or loss caused by a mistake made by your company. Your risk management plan as part of your business insurance plan will limit the risk of error; however, that risk cannot be eliminated. Liability insurance covers the business for this risk.
For small businesses, many insurers package liability insurance into a larger insurance policy including property and casualty insurance. We call this packaged policy the “Business Owners’ Policy” or BOP. However, your business may be better served by a separate Commercial General Liability policy or CGL. We can discuss these options with you.
Liability insurance protects you from claims of injury or damage to third parties. A general business liability policy provides coverage for more common risks of bodily injury to customers or visitors to your premise or property damage. It is extremely important to have proper liability insurance protection for your company, your employees and you in the event that you are sued.
You, your customers, and your visitors are covered here. Your employees fall under a different insurance category, however, and are covered by Workers Comp Insurance, which is required.
Specialized liability insurance options
Bodily injury or physical damage is what most people think of when it comes to liability; however, there are a variety of other liability exposures that can put your company at financial risk. General liability insurance does not protect against professional negligence that can lead to an expensive legal defense.
Depending on your type of business there are a variety of specialized protection options to consider. If you want to discuss specific liability insurance needs for your business, email, call or visit us or request a business quote online. We will help you develop a custom protection plan that fits your business.
Here are brief descriptions of some specialized insurance products:
We can also discuss whether or not the additional protection of a Commercial Umbrella Policy is appropriate for your business needs.
Employment Practices Liability
Challenging economic times often bring an increase in lawsuits for a variety of employment related claims and can involve current, former or potential employees. Employment practices liability insurance or “EPLI” is liability insurance that covers certain employment related claims made by employees. For example, if a manager harasses or discriminates against an employee (or is alleged to have done so), EPLI will provide a defense and possibly claim payment on behalf of the business. In today’s world this is critical coverage to have if you have employees or if you have employees working with the public or on site at other businesses. Such coverage can also protect the business owner from meritless claims brought by disgruntled employees.
EPLI policies and coverage are less standardized than other forms of coverage. Sometimes EPLI coverage is bundled in a business owner’s policy or as a part of other liability insurance. It may also be a separate coverage or endorsement. EPLI coverage generally covers:
- Workplace Harassment
- Workplace Discrimination
- Wrongful Discharge
- Emotional Distress
- Possibly Privacy-Based Claims
- Possibly Reputation Claims (Defamation)
This coverage is a bit complicated and we recommend that you come in and discuss it with us.
EPLI coverage should be a last line of defense. Proper risk management and business insurance planning for your business will include training. Diversity and sensitivity training must be part of that training. The U. S. Equal Employment Opportunity Commission is a phenomenal website with free training resources, guides, compliance information, and links to free training throughout the U.S. Another site that is exceptionally good is the Human Resources Guide.
Errors & Omissions and Professional Liability
Accusations of negligence or the failure to perform your professional services are things that any professional services business can be sued for, even ino mistake has been made.
You should seriously consider E & O insurance if your business:
- provides a professional service.
- regularly gives advice.
- is required by its clients to have E & O insurance.
Errors and omissions insurance (E & O, professional liability or malpractice) protects you against an error that causes injury or damage to a third party. It provides you with financial protection if you are sued because someone accuses you of failing to take appropriate action or negligence causing them financial damage. It covers damages, jury awards and legal defense costs. Even if you are sued and not found responsible, the legal fees alone can be financially disastrous without protection. It’s important to note that it must be negligence not an intentional act. E&O protection is important for a wide variety of professionals including but not limited to counselors, doctors, dentists, accountants, attorneys, architects, consultants, chiropractors, engineers, psychologists and real estate agents.
Directors & Officers Liability
If you are a director, officer or manager of a business or a non-profit organization, your participation in planning, directing and reviewing organizational activities puts you at risk for being named in lawsuits related to alleged breaches of duty, errors in judgment and other situations that caused a third party to suffer a financial loss. Unless a business or organization has Directors & Officers coverage, individuals performing these roles have liability exposures that are unprotected and have serious financial risks. Be sure that all organizations in which you play a leadership role have proper insurance coverage in place to protect you.