Is This Lawsuit Covered? Maximize Your Protection With Business Liability Coverage
Did you know a man sued Uber for ruining his marriage because his wife used the app to discover he was having an affair?
Yes, the case was frivolous, but Uber still had to answer the filing in court and defend itself to get the case thrown out. Lawsuits impact businesses every year. If your business is involved in one, it can cost you tens of thousands of dollars to defend yourself — even when a lawsuit is without merit.
The right insurance policies — especially business liability coverage — can make all the difference in keeping your small business operating during a lawsuit and financially viable afterward.
What Is Business Liability Coverage?
Business liability coverage helps a company defend itself against liability lawsuits and can pay some or all the damages if the business is found liable.
What are some of the damages that courts can assess against a business? Courts can assess a variety of damages against the company:
Restitution: The business could have to pay back money someone paid it.
Compensatory damages: If your business causes injury or loss, the company could be required to pay for actual damages or estimated future losses to the other party.
Punitive damages: If the company is found liable for a particularly egregious failure, the court can assign additional fines as punishment.
Paying these damages — and any court fees — can be a significant financial burden for the company and this could cause it to fail. That’s why having insurance in place is so essential.
What Insurance Coverage Do You Need?
It’s important to remember that there are many types of business liability. For example, you could be liable if someone slips and falls in your store. You could also be liable if there is a breach in your computer system and customer data is compromised. Or you could be liable if an employee is injured during work. Each liability claim is different and falls under a different kind of insurance coverage.
Commercial General Liability
General liability coverage is part of a businessowners policy (BOP). It covers lawsuits that allege injury or property damage to another party due to your business practices.
This coverage will help if a customer or vendor slips and falls on the business property or is harmed by your product or service and then files a lawsuit against your business. It can also protect you from charges of libel or slander.
Errors and Omissions Insurance
We’re all human, so we all make mistakes. Unfortunately, some of those mistakes can cost your business a lot of money. Errors and omissions that cause harm to a customer or client can result in a liability lawsuit.
Fortunately, you can get errors and omissions insurance, which protects your business if someone files this kind of lawsuit against the company.
Employment Practices and Liability Insurance (EPLI)
Customers and vendors are not the only ones who can file lawsuits against your company. Employees can also file suit if they feel that there were unfair employment practices, sexual harassment, discrimination, or other employment-related issues.
EPLI will help defend the business and can help pay some or all of the damages if you’re found liable within the parameters of the policy.
Directors' and Officers' Liability
Errors and omissions insurance helps cover mistakes made by business employees, including leaders. Directors' and officers' liability insurance is specific protection for executives to help protect their personal assets if they are sued as a result of their work in the business.
If an executive is found liable for damages, the defendant can often go after the company’s money and the individual’s assets. A directors and officers liability policy protects leaders from these claims on personal assets.
How Well Protected Is Your Business?
As you can see, there are a lot of liabilities your business is exposed to. Not only do you have to plan how to respond to legitimate incidents that affect your business, but you also need a way to defend yourself against frivolous claims without losing significant time and money.
The best way to do this is to have the right insurance coverage. Commercial liability coverage is the beginning, and it doesn’t cover everything. To ensure you have all the coverage you need, contact us today.
Dan Zeiler
dan@zeiler.com
708-597-5900 x134