What does Business Liability Insurance actually cover?

The nature of your business will define the type(s) of liability insurance you will need to maintain. There is one at the head of the class, and this is probably the one most agents are trying to sell you. What follows is a very high level summary three standard liability insurance types that are worth considering.

Commercial General Liability Insurance is a must for any operating business. CGL policies cover claims arising from allegations of bodily injury or property damage to third parties associated with your work. It also provides coverage for a class of acts known as personal and advertising injury, which most often apply to allegations of slander, or statements on a website that are not accurate and result in harm. For small businesses, this may be integrated in what is known as a Business Owner's Policy (sometimes called a BOP) that can also include property and other coverages.

If you have others who are serving on a board or as advisors for the company, you may want to consider Directors & Officers Liability Insurance. In today's world, few knowledgeable directors will serve a company without this coverage in place. It protects them for decisions made in their capacity as directors and officers. It can also be extended in some circumstances to include staff in executive and policymaking positions.

There are various types of Professional Liability Insurance you may want to consider based on the kind of work your company does. If you are in a business where people rely on your professional judgement or recommendaions, this can be particularly important and is generally not covered in the coverages above. In today's environment, Publishers Liability may make sense if you are in a writing and publishing business, including online content for yourself or others or with ebooks promoting your business. A CGL provides some coverage as long as you are not in the publishing business; however, the definitions are very important to evaluate carefully.

In evaluating what you need, here are two more recommendations:
1. Find an insurance broker, not an agent that represents an insurance company or two. A broker represents his or her clients first, where the agent's first loyalty is to the company for which he or she sells. You want that important degree of independence. There are some great regional insurance brokers I could suggest for you to consider.
2. Evaluate carefully the nature of your business, as Edward suggested, and understand the risks associated with it. For small businesses, most can be insured, though not all. Knowing the distinctions will be important in the way you'll work, grow and success.

Business liability insurance provides coverage for third party claims. In plain English, people who have been harmed or believe they have been harmed by your actions. You need a liability policy to satisfy requirements of your leases, government licensing authorities, and to protect your assets and livelihood.

An insurance policy is made up of several parts;
• The declaration pages. This defines your business, the limits of insurance provided and your deductibles.
• The actual policy language of what is covered and what is excluded.
• Endorsements that will either restrict coverage or add additional coverage.

Most insurance policies provide a package policy for the types of businesses they insure. A package policy is a combination of coverage forms that provide protection for the various types of liabilities for a particular business. The most common types of coverage include;
• Bodily Injury
• Property Damage
• Advertising Injury
• Legal Liability Insurance
• Employee Benefits Liability Insurance

Depending upon your business type, insurers will add liability coverage for the unique exposures and liabilities of that type of business. For example an auto repair shop will have probably want coverage for the following liabilities;
• Commercial Auto Insurance. Coverage for the cars they own and operate.
• Product Completed Operations. Coverage that pays for faulty repairs.
• Garage Keepers Insurance. Covers damage to customers vehicles while in the care custody and control of the business.

There are additional liability policies that should be considered such as Employment Practice Liability Insurance. This type of liability covers you for discrimination, wrongful termination and sexual harassment. Coverage can be limited to just your employees, or may even cover allegations by customers or vendors. These claims can easily cost tens of thousands just to defend the allegations.

It is important to understand the limit of insurance provided by your policy. All liability polices have a limit of the amount of insurance for any one particular claim, and an annual limit for the policy. The common limits issued range from $300,000 to $2,000,000. You may want to consider an umbrella policy which increases the limit of insurance available for an occurrence. If you have company vehicles, a severe accident could easily expose your business to a multi-million dollar claim. One claim involving a driver resulted in a five million dollar settlement, due to a wrong death claim.

ALL BUSINESS SHOULD HAVE LIABILITY INSURANCE. HOW CAN YOU SLEEP WITHOUT IT. I HAVE A GOOD FRIEND OF MINE CALL HIM

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