Every business owner should be educated about insurance coverages before their business opens. Protecting your business and personal assets is of utmost importance. As you begin the process of educating yourself about business insurance, commercial liability insurance will often be the first coverage you consider.
While conducting business, every business owner can be held responsible for the safety and well being of their customers. While in an establishment, if a customer injures themselves it is very possible that the business owner will be legally liable. This means that the owner would be required to compensate the injured for the injury to their body. Coverage of this nature is called bodily injury coverage.
Personal Injury is another type of coverage included in a standard liability contract. Personal injury is distinctly different that bodily injury as it is less tangible. Personal injury is often of a psychological nature rather than a physical nature. An example of personal injury might be slander. When a consumer is slandered by a business owner or one of it’s employees, the owner can be held responsible. Insuring against such claims is extremely important.
Advertising liability is yet another type of liability covered in a commercial contract. If a business inadvertently uses copyrighted material in their advertisements, the owner could be held financially responsible for the copyright infringement. This is a situation that may be protected against under a commercial liability contract.
General commercial liability contracts typically have a moderate dollar limit on claims. Therefore, it is important for business owners to obtain appropriate levels of coverage to protect their assets. For example, if a business owner is found responsible for a 1,500,000 dollar claim and their policy provides a one million dollar limit, the owner would be responsible for the additional five hundred thousand dollars. This type of judgement could devastate a small business owner.
If a business requires higher insurance limits than a general liability policy can offer, it is common to purchase an umbrella policy. Umbrella policies are an aspect of commercial liability insurance designed to provide higher limits of coverage. When a business has more to lose, it is important to carry higher limits of liability coverage. As always, when choosing how to protect your business it is wise to utilize the services of a licensed professional. Take the time to find a general agent or insurance broker to help you navigate the tricky field of commercial liability insurance coverage.
Different industries require different insurance coverages. For example, a general contractor should consider contractors insurance. Or professionals may need errors and omissions insurance coverage to protect against potential mistakes they make that can cause their customers to experience a financial loss.
Article Source: Commercial Liability Insurance Coverage Briefly Explained