All businesses work with clients and
customers directly. Some offer products while others offer professional
services. In both cases, your consumers and employees expect that they remain
safe from bodily injury, personal injury, and property damage at all times
while they interact with you.
The moment a client walks onto your
premises and sustains an physical injury or a financial loss before, during, or
after a transaction, you will be held responsible for any legal feels or claims
awarded. You may foresee how accidents or other liability claims may arise, but
you cannot prevent them entirely. Sometimes, the most absurd of circumstances
is what causes a claim to be filed against your business.
McDonald’s once had a liability lawsuit
filed against them for serving hot coffee which later scalded a customer.
Because customers do not sign liability waivers upon entering, even a product
that is designed to be hot is by default a liability risk.
Liability claims can generate
considerable financial damages for the defendant. General Motors was sued for
using coolants in their vehicles that produced dangerous chemicals. This
lawsuit was awarded in favor of the plaintiffs, which resulted in GM paying $25
billion to its 25 million customers, excluding legal expenses.
Very few small businesses can survive after paying for a single liability claim, plus legal defense fees. Therefore, every business needs liability coverage to shield themselves against such enormous expenses. Let’s take some time to go over the details concerning liability policies.
Liability is defined as the state of
being legally responsible for something. Liability insurance is broken down
into two separate policies:
General Liability Insurance – A general liability
insurance policy is designed to protect
the insured party against lawsuits from clients and third parties. A claim can
be made because of:
sustained by non-employees in your business premises that lead to medical
created by your actions, whether intentional or unintentional.
on your part such as copyright infringement, slander, or libel.
Court costs for
liability lawsuits (criminal defense is considered an exclusion).
Professional liability insurance – If you provide counsel or services, as personal trainers do for
example, you are likely to come across clients who will not be satisfied with
your services or experience an inverse effect from either your counsel or
services. Additionally, in the line of duty, you may ignore or omit certain
things that may cause a client to incur financial loses. These types of risks
are covered by a professional liability insurance policy (which is also known
as an errors & omissions insurance policy).
Take this situation for example: A doctor
who misdiagnoses a patient is liable for a lawsuit from the patient. The
mistake can be due to negligence, or a failure to identify the symptoms
correctly. Professional liability coverage is designed to cover the cost of defense
from such claims, hence protecting the insured from the financial burden.
To recap, let’s break everything down
into seven advantages that you’ll get once you opt into liability insurance
If an accident
occurs that nobody could predict would ever occur, a general liability policy
can protect your business from the financial consequences.
Human error is
neither an excuse nor a legitimate defense for professionals. A professional
liability policy covers negligence as well as claims made by those who trusted
your counsel, only for them to lose more than they gained.
The defense costs
and payouts for claims awarded is an expensive burden to any business. Whether
you win or lose in civil court, these costs will be covered by the insurance
company you work with.
transfers the associated risks related to your business over to your insurer.
You then have peace of mind and can concentrate on the important aspects of
your day-to-day business.
are ruthless and will exploit your weaknesses to their advantage. Consumers are
also out looking for opportunities to make the most out of an unfortunate
situation. These two types of business insurance increase your professional
image in the eyes of your competitors and your customer base.
require that all professionals within them must have liability insurance i.e.
the construction industry. To be legally compliant, you must take up at least
one of these policies.
To win bids on
projects, you must prove your financial capability including insurance for the
project. Thus, having a liability insurance plan in place can actually gain you
more clients than you would otherwise.
Some consumers may argue that they work
remotely and do not serve the general public. However, freelancers have been
sued for liability in the past. A web developer who does not complete a
client’s website as per the contract agreement is liable for liability lawsuit.
Graphic designers using the same content for different clients infringes on their
original client’s copyright, which can also cause a liability lawsuit. All
forms of businesses, therefore, do need liability insurance.
If you are a business owner lacking liability insurance, the time to acquire a comprehensive policy is now. The longer you wait, you expose your business to considerable risk. Contractor’s Liability has a team experts on hand that can assist you with matters concerning liability insurance. Whether you are a handyman, plumber, hotel owner, or a coach, we understand exactly what coverage your business needs.
Contact us today for fast and affordable
liability insurance coverage for your business!