As a business owner, you pose liability risks to other parties. These include your customers and your employees. You therefore likely know that you need liability insurance for the business. However, simply assuming that customers and employees all need the same types of coverage is the wrong course of action.
You will usually need at least a few different liability policies to get a comprehensive amount of protection. Here are a few examples.
Commercial General Liability Insurance
Start with a basic level of business liability coverage. Get a commercial general liability (CGL) policy. It will pertain to certain risks you pose to third parties. Most often it covers:
However, take notice of the fact that these policies usually don't cover more than these two types of losses. Therefore, you'll probably need more liability policies to shore up the business.
- Bodily injury liabilities: If a client gets hurt when doing business with you, this coverage can pay for their medical bills, supplementary income and other costs.
- Property damage: You break or damage a client's belongings, then you can use this coverage to pay for the damage.
Errors & Omissions Insurance
Professional business owners always pose threats to a client’s finances. For example, a lawyer or CPA might give advice that leads to a client's financial losses. Therefore, they might sue you to recover the lost money. This is sometimes called professional liability insurance. It's there for the cases where your professional actions harm others.
Workers' Compensation Insurance
The thing about CGL and E&O insurance is that they usually apply only to your clients or vendors. They often don’t apply to your employees and the injury risks you pose to employees. For these cases, you'll probably need to turn to workers' compensation insurance.
This coverage exists to help employees who get hurt or sick on the job. For example, if one of your workers falls while moving boxes and breaks their leg, then this coverage might assist them. It can help them pay their medical bills and receive a supplementary income. Therefore, they'll have assistance in their recovery.
Don't forget, your business might do more than just physical harm to an employee. The employee might allege that they have suffered harassment, discrimination or other illegal actions through their employment. Prospective hires or terminated employees might also allege misconduct. In these cases, Employment Practices Liability Insurance (EPLI coverage) might help you pay them settlements, and cover your own legal fees.
The important part of liability insurance is that you cover your clients and employees as effectively as possible. The more protection you offer them, the more they can rely on you to do the right thing in case of unfortunate accidents.
Contact Mitchell & Mitchell today to get personalized liability coverage for your business.
Also Read: Do You Need Cyber Liability Alongside General Liability?