Commercial Insurance: Liability Insurance Covers for Your Business

Liability insurance is a critical part of the general commercial insurance system. This type of cover is designed to protect businesses from the financial risks associated with lawsuits and other similar claims. In simple terms, if you purchase the liability insurance for your small company, you will be protected from third party monetary claims that are within the scope of the coverage. There are different types of policies in this category that can benefit your business operation. Here is a brief description of the most advantageous covers to consider for liability protection.

Public Liability

If your commercial operation interacts with the general public, the public liability insurance is crucial. Basically, this type of cover is designed to protect the establishment against third party lawsuits that are related to incidences of injury of individuals and damage of property. The claims are only valid if the pertinent problem is a direct result of the business activities. The public liability policy will cover for the costs required to right the situation with the wronged third party. For instance, if a customer trips over cartons in your premises and sustains injuries, the insurance will pay for the medical expenses and other related losses.

Professional Liability

Professional liability is also known as the professional indemnity or the errors and omissions insurance. This is not a mandatory or critical policy for all types of businesses. However, if you are involved in providing services or even expert advice to clients, this is an important financial risk management tool. This type of insurance will protect you against the losses that clients might experience after receiving your services or following your guidance. The common legal issues related to professional liability include malpractice, general negligence and errors in providing services. You should consider purchasing professional liability insurance if you perform consulting work, accounting, legal counsel tasks, medical work or other similar jobs.

Product Liability

If you are involved in the production, distribution and sale of any type of product, you should purchase a product liability insurance policy. Generally, this type of cover will protect you against claims related to the negative impact of the pertinent commodities. For example, if a person purchases an edible product and it causes some adverse reaction, they can launch a lawsuit for compensation for the harm caused. You should note that this type of claim does not consider your intention to harm with your item. The amount of insurance that you should get will depend on the type of items involved and their potential risks.