Anyone who operates a company should understand how vulnerable they are to the various claims that are often faced by many different businesses. Therefore, it is required by law for every company owner to prepare themselves with a primary line of defense by purchasing a commercial liability policy to protect their investments.
With the day-to-day uncertainties of operating a business, no matter the size or scope, it's always comforting to know that when something goes awry you have the backing of commercial liability coverage to help for all the claims that could be reported by customers against your business.
Following is a list of a few different types of commercial liability insurance that will protect your company and you from a fiscal disaster:
General Liability Coverage
Every business should invest in commercial general liability coverage to shield the company from advertising claims, injury claims or claims of property damage. The majority of employers survive through using only this kind of insurance, but if you purchase it as part of a business owner's policy then you will normally get minimal coverage. However, you can always purchase this type of insurance as a separate policy to have more protection. As a rule of thumb, a company needs additional liability insurance coverage if it is faced with increased risk depending on the nature of the services or products that the business offers.
Professional Liability
If your operation is service based, the commercial liability insurance that is most fitting for your business is professional liability insurance. This insurance will help you cover the costs and damages that may be present when a customer files a negligence claim in case of error or omission, financial pitfalls or claimed failure to perform on the part of the policyholder. If you are in the legal or medical fields, you are legally required to have professional liability insurance.
Product Liability
Businesses that are engaged in the selling of physical products will thoroughly benefit from product liability coverage. This coverage will protect you if a customer suffers loss or injury due to a problem or defect in the merchandise. If you already have general commercial liability insurance, then look into the inclusions as it normally has products-completed operations insurance, which is exactly the same thing as product liability. In retail, you might face many or all kinds of claims including production or manufacturing flaws, deficient design or incomplete warnings and instructions. Ask any business that had the misfortune to go against product liability claims and they will tell you how such claims can quickly put you out of business.
Running your own business or practicing your profession can be lucrative but it does have one severe disadvantage: a vulnerability to claims. Though this shouldn't stop you from starting a business, it should serve as a warning and push you toward purchasing the required commercial liability insurance to keep you protected from adverse claims that can ruin your company.
Giacomo Palermo is an insurance expert who has helped individuals and residents in getting affordable, competitive commercial liability insurance in California and major medical insurance quotes for the past 20+ years.
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