Understanding Liability Insurance for Businesses

Errors or accidents affecting other parties can significantly impact your business. These incidents can lead to costly financial losses, lengthy legal proceedings and far-reaching reputational ramifications. Considering these consequences, assessing and addressing potential liabilities with suitable business liability insurance should be a top priority.

What Is Business Liability Insurance?

Your business should first understand that there may not be a single type of liability insurance capable of fully covering all potential incidents and third-party losses. To fully cover your business and mitigate possible losses due to such situations, you may need to combine several separate insurance policies. Still, while this may sound like a significant investment, the potential costs of cutting corners or failing to secure adequate liability coverage could be more significant.

What Types of Business Liability Insurance Should I Have?

Businesses must thoroughly analyze their operations, including possible risks and exposures involving third parties, to assemble and maintain adequate liability coverage. When composing or revisiting your loss control measures, consider the following common types of liability insurance:

• General liability insurance—These policies can play a critical role in responding to the financial repercussions of third-party bodily injuries, property damage and personal and advertising injuries. For example, if a customer is injured while visiting your business, this coverage may assist with resulting medical bills and financial losses.

• Professional liability insurance—This type of insurance, also known as errors and omissions insurance, should be a top priority if your business provides services to clients and customers. If your employees commit a professional mistake, fail to meet deadlines or otherwise fail to deliver adequate services, affected parties may sue you. Fortunately, professional liability insurance can assist with resulting losses and legal expenses.

• Employer’s liability coverage—This financial protection is usually included in workers’ compensation insurance, which is required by law for many Texas businesses. With this type of coverage, your business can receive financial assistance should an employee who has been injured or made ill on the job file a lawsuit.

• Cyber liability insurance—In the digital era, this type of insurance may be crucial to help you respond to the ramifications of data breaches and other cyber incidents. For instance, you could face lawsuits if your company stores customers’ private or sensitive data, and cybercriminals can hack its systems and gain access. In these situations, cyber liability coverage may offer crucial aid.

• Commercial auto liability coverage—This type of coverage is generally required by law if your business uses vehicles for business purposes. Retaining this financial protection can make all the difference should you or your employees be at fault for an accident on the road that inflicts bodily harm or property damage on other parties.

• Commercial umbrella insurance—In some cases, third-party losses for which you are at fault may incur exorbitant losses that could even exceed policy limits. In such situations, commercial umbrella insurance can step in as a secondary form of coverage, offering additional aid to limit out-of-pocket losses.

We’re Here to Help

At All-Integrity Insurance Agency LLC, we’re well-versed in the world of business liability insurance. Contact us today to learn more about your options.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.