Businesses need insurance to protect themselves from potential liabilities that could result in a lawsuit. These can include accidents, injuries, property damage, professional errors, and more. The insurance can help cover the costs of legal fees, settlements, and judgments if your business is sued.
This article takes a closer look at each type of business liability insurance to further expound on the significance of having some form of business liability insurance in place.
General Liability Insurance
General liability insurance helps protect businesses from liabilities that could arise from day-to-day operations. This can include things like accidents, injuries, property damage, and more. For example, if a customer slips and falls in your store, general liability insurance can help cover the medical bills and any potential lawsuit that could come as a result.
The customer might strongly feel that it was your business's fault that the accident happened, and without insurance, you would be responsible for footing the entire bill. This can actually dent your business's finances and reputation if not handled well.
Product Liability Insurance
Product liability insurance protects businesses from liabilities that could arise from selling or manufacturing products. This can include things like injuries, property damage, and even long-term health effects.
For instance, if you deal with processed food products and someone gets food poisoning, product liability insurance can help cover any potential lawsuit you might face. Long-term health effects are also covered under product liability insurance, so if you sell a defective product that causes serious injury, your business will be protected.
In some cases, businesses are required to have product liability insurance, especially if they deal with high-risk products. This is because the potential for liability is much higher if you sell or manufacture your own products.
For example, if you sell or manufacture cosmetics, you might be required to have product liability insurance in case your products cause an allergic reaction or another side effect. You need to be prepared in case something goes wrong, so make sure you enquire about product liability insurance if you don't already have some form of coverage in place.
Professional Liability Insurance
Professional liability insurance, also known as Errors and Omissions insurance, protects businesses from liabilities that could arise from professional negligence. This can include things like mistakes in your work, miscommunication with clients, and more.
For example, if you're an accountant and you make a mistake in your work that causes financial loss to your client, professional liability insurance can help cover the damages. In other words, this type of insurance can also help cover the legal fees if a client sues you.
This is an important type of insurance for businesses that provide professional services. Clients often trust you with their finances or business, so they expect a certain level of professionalism and expertise.
If you make a mistake, it can have serious repercussions for your business. That's why professional liability insurance is so important – it can help protect you from the financial damages that might result from a lawsuit. For more information on business liability insurance, contact a professional near you.