What You Need to Know About Liability Insurance for Your Small Business

Learn the basics of commercial liability insurance.

As a business owner, you know how important it is to secure the right small business insurance for your company.  One of the most important policies for any business is liability insurance.  But what does this type of insurance cover and how can you secure this coverage for your company?  Here’s what you need to know about commercial liability insurance.

What Does It Cover?

In general terms, liability insurance covers third-party claims that a business caused them bodily injury, property damage, or other losses in some way.  For instance, if a customer slipped and injured themselves while on your business’s premises, then your company might be held liable for his or her injuries.  Liability insurance would provide coverage for the affected party’s medical fees and recovery costs.  Additionally, if they decided to sue your company for damages, then your liability insurance would cover the costs associated with your legal defense and, if necessary, your settlement.

Different Types of Liability Insurance

Commercial liability insurance comes in many different forms and business owners have the ability to secure coverage for specific liability risks.  Some of the most common types include:

  • Commercial General Liability: This is the most basic and broad form of liability coverage. Commercial general liability offers coverage for personal injuries, property damage, libel, and slander.
  • Product Liability: This is a specific type of liability insurance that offers coverage for the products manufactured and/or distributed by a company. Product liability offers coverage in the event that a defective product causes injuries or damages.
  • Professional Liability: Also known as errors and omissions insurance, this type of insurance offers coverage for businesses that offer market services rather than products. Professional liability insurance offers coverage for claims of professional mistakes, malpractice, or negligence.
  • Cyber Liability: This type of insurance offers coverage in the event that a business is the victim of a cyber attack or data breach.

Liability Insurance Does Not Cover Everything

It’s important to remember that liability insurance is only designed to cover third-party claims.  This means that liability insurance will not cover employee injury claims—this is what workers compensation insurance is for.  Additionally, liability insurance does not coverage intentional acts or the damages sustained by such acts.  Common examples of intentional acts include employee fights and criminal activity.

This is what you need to know about commercial liability insurance.  Do you have further questions regarding your small business insurance?  Then turn to the professionals at PMC Insurance Group.   Contact us today to learn more about getting competitive coverage for your small business clients.