All businesses have one thing in common—the need for protection from liability claims. These claims arise when you are legally obligated for someone who was injured while on your property, if an employee injures someone else or someone else’s property, if your product causes bodily injury or property damage, if your business is located in a rented space and damage occurs to that rented space, and many other legal claims such as libel, slander, copyright infringement, and claims of false or misleading advertising.
Bodily injury claims, such as slip-and-fall injuries, as well as other types of negligence claims can result in lawsuits, requiring your business to pay for damages awarded by the court. A commercial liability insurance policy will pay to defend your business against a lawsuit, as well as pay damages up to your policy limits. If damages exceed your policy limits, your business will be responsible for paying the remainder of the damages.
Commercial liability insurance can be purchased as a separate stand-alone policy, or you can bundle it with other business insurance policies (Businessowners Policy (BOP), or Commercial Package Policy (CPP)). Discussing your business needs with an independent insurance agent is the best way to make sure your business is protected. Your agent will help you decide on the amount of coverage you need, which is based on both the type of business you have, and the location of your business.
Depending on your business needs, your agent might recommend additional coverage limits, called excess insurance or umbrella insurance. These policies are in excess of your coverage limits, which is particularly important if you work with contracts. Review your contracts with your agent to make sure you have adequate commercial liability limits to cover you for the requirements set forth in the contracts (e.g. additional named insured for the project, stated policy limit amount).
A commercial liability insurance policy will not, however, cover all types of liability your business will face. Non-covered types of liability claims include, but are not limited to, workers’ compensation, intentional acts, and your work and work product. Review your business practices with your independent insurance agent to make sure you are covered for all types of liability your business may face.