Business owners face unique risks that could land them in legal trouble. With our industry expertise and a substantial network of top brokers, we can help protect your company with the right liability insurance.
What is liability insurance?
Liability insurance is a broad term. It describes coverage that responds when your business is found legally responsible for bodily injury caused to another person, damage to their property, or other losses as a result of errors in your work. Specific types of liability insurance will extend coverage to specific situations, professions, or business requirements.
Risk is inevitable in business, and you could find yourself tangled up in a lawsuit whether or not your business did anything wrong. The right liability insurance coverage can help you mitigate losses arising from a liability claim, so you can better protect your bottom line.
Commercial General Liability (CGL)
The standard liability policy for most businesses, CGL, is designed to cover claims of bodily injury or property damage arising out of your work or your products. This coverage can spring into action when your business is found liable for an injury (such as a slip and fall) or loss either on your property or while you or your staff are working offsite, whether or not the damage was your fault. A CGL policy can provide welcome financial support as you go through the legal process.
Product liability insurance covers claims involving property damage or bodily injury caused by products your business manufactures, sells, or supplies. If a client or customer believes your defective or dangerous product caused them a loss – whether physical or financial – they could demand that you compensate them for that loss. In many cases, this type of coverage is included in a CGL policy.
Professional liability insurance helps cover the costs of defending a claim brought against your business due to your alleged professional negligence. It’s also known as errors and omissions insurance, and it can protect you in situations where you’ve made an error in your work, you’ve omitted an important element, or you’ve provided incomplete or inadequate service. The complicated nature of professional liability claims can often call for more specific and extended coverage than CGL insurance can provide.
Who needs liability insurance?
Whether you make a product, sell a product, or offer a service, you need to protect your business against the consequences of work or workplace-related incidents. No matter the industry, size of business, or where the work takes place, business owners need some liability coverage.
Here are some instances when liability insurance can save the day:
Bodily injury to a delivery person
You may think of liability coverage as protection against claims from your customers, but delivery personnel, vendors, and other third parties could name your business in a liability lawsuit too. For instance, if a courier tripped and fell on your property while delivering a package to your office, they could blame your business.
The financial consequences of a bodily injury that results from your work, product, or worksite can be extensive, including costs related to pain and suffering, lost wages, and medical bills. Fortunately, your CGL policy can offer financial support to offset many legal costs that may arise.
Damage to a customer’s property
While it’s important to keep your workplace clear and safe for your customers, you also need to consider what could go wrong when you take your work on the road. Even when you’re offsite, you may run into trouble if your work or product causes damage or injury.
Consider a catering company working at an event, where an employee accidentally breaks a major piece of commercial kitchen equipment. The owner of the venue could blame your company for the damage, and demand compensation for the repair or replacement cost. This is where your property damage liability coverage would come into play.
Lawsuits against the quality of your work
A small mistake in your service can be enough to drain your client’s bank account, resulting in a lawsuit. For instance, say an employee trained as an organizational consultant gives poor advice to a struggling company. As a result, the business loses key employees that were crucial to the company’s success, and they go bankrupt. In that case, your company could be hit with a big bill for money lost and legal proceedings.
Professional liability lawsuits are often drawn-out affairs that can be extremely expensive. But the right professional liability insurance can pick up where your CGL policy left off, helping to cover the compensation costs you’re ordered to pay as well as legal expenses.
What can a broker do for me?
An insurance broker can be your greatest asset when it comes to finding the right insurance policy. A broker brings a wealth of insurance expertise, product knowledge, and personalized service to the table, working to protect your company and your peace of mind.
Northbridge believes in the power of strong partnerships. Our preferred network of reputable brokers can help craft a comprehensive policy that’s suited to your unique business.
Are you managing your risk?
Risk is a part of life – risk management should be, too. It can be challenging to make space for risk mitigation in your daily routine, but this is a corner that shouldn’t be cut. After all, even if you have the right insurance coverage, preventing a loss is always better than recovering from one.
Risk management solutions can be as simple as improving the layout of your workspace, or as involved as launching a company-wide training program. Our Risk Services experts can help with both. In fact, we’ve made access to risk management expertise a fundamental feature in every commercial Northbridge insurance policy.