The United States is home to millions of businesses. A huge percentage of these businesses are owned and operated independently. However, with every new business that opens their doors, another one may close its doors for good. What can be the reason for the high annual closure rate?
One reason for this is a lack of business liability insurance. Business liability insurance protects your company in case of a lawsuit against you or your business.
4 Main Types of Business Liability Insurance
1) General Liability
If you make a particular product that a customer uses and eventually gets injured, they may pursue your company for the damages. General liability protects your business if you need to go to court and pay for the settlement.
The general liability insurance provides coverage for your business for four kinds of events: libel/slander, property damage, medical costs and bodily injury.
If a small partnership or sole proprietorship runs the company that does not afford the protection of the owner as a legal corporate entity, you can protect your assets using general liability insurance. It will help if you caused injury, a partner wants to depart the company, or you need to sign for a business loan.
Some specialty endorsements should be in your specified industry that includes some specialty endorsements.
2) Umbrella Liability
If you work in an industry that is high risk, court settlements can bankrupt companies that are affected.
In this scene, take out an umbrella liability insurance policy to protect your business from damages that are above what the general liability policy covers.
The umbrella policy is beneficial if the company is involved in more than one kind of industry, does business internationally, or runs a fleet of company cars.
3) Officers & Directors Liability
If your company is for nonprofit or profit regardless of the total number of employees and its revenue, a board of directors probably governs it. The officers and directors may resort to their best to protect the company from legal exposure, but it may not be enough to protect them from personal liability.
It will be tough to attract the top talent to represent your board of directors in this situation unless you give each officer and director the protection of Officers & Directors Liability insurance.
This policy will allow the officers and directors to continue their legal due diligence for your company without any fear of reprisal for the actions they take on behalf of your business. It also covers the company's payment of necessary legal costs and financial losses that may occur because of the officers and directors' actions.
4) Errors and Omissions Liability
Companies that offer high risk services like doctors and dentists are not the only business that should have E&O coverage. In the litigious society today, a lot of businesses may benefit with this protective policy in place.
They designed this insurance to protect people who act in a professional capacity on behalf of a company. Here, "professional" is under consideration as someone who does the following:
a) provides professional services with a fee
b) operates under a set of provincial regulations and laws
c) adheres to guidelines that an industry professional organization or association outlined
d) attended training that will qualify them for the role
The first policy in Errors & Omissions provides a moderate level of coverage in case there is a transmission of advice that was not complete or valid, breach of contract, delay in providing services, defect in design, an incorrect appraisal, and other similar situations.
At Wellcovered Insurance Group we take pride in making sure our clients are well protected at prices they can afford. To learn more about how we can help you please contact our agency at 1-386-218-4951 or Click Here to request a free quote.