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What Does Business Liability Insurance Cover?

Concept of Women in suit showing insurance policy and pointing with a pencil

Business ownership requires strong protection against unexpected liabilities. That’s where business liability insurance steps in. But what exactly does this type of insurance cover?

This blog will uncover the different layers of business liability insurance and how they can help you. Understanding these policies helps protect your business from potential financial risks.

What Is Business Liability Insurance?

Business liability insurance protects your company from financial losses due to claims of accidents, injuries, or negligence during operations. It can sometimes be referred to as a corporate general liability insurance. It covers costs from lawsuits and legal fees that could otherwise financially cripple your business.

Business Liability Insurance Coverages

There are different types of business liability insurance coverage, each designed to cater to specific needs:

General Liability Insurance

General liability coverage is the most basic form of business liability insurance and applies to all business types. A general liability policy provides coverage for:

  • Bodily injury: Legal defense, and liability settlement costs associated with injuries that occur on business premises or due to operations, including medical expenses.
  • Property damage: It covers damages your business causes to someone else’s property.
  • Personal and advertising injury: Protects against claims of slander, libel, and copyright infringement in your advertisements.

General Liability Insurance Offers Some Product Liability Insurance Coverage

Business liability insurance coverage protects manufacturers, distributors, and retailers. It covers:

  • Manufacturing or production flaws: Damages from a defective product that causes injury or harm.
  • Design defects: Claims related to a product’s design that makes it unsafe.
  • Defective warnings/instructions: Covers claims due to inadequate instructions or warnings that don’t alert consumers about potential risks.

What Doesn’t Business Liability Insurance Cover?

Business liability insurance coverage is wide, but you may still need additional commercial liability policy coverages to protect your business.

Cyber Liability Insurance

As businesses increasingly operate online, cyber liability insurance becomes critical because it covers the financial costs associated with:

  • Data breaches: Costs associated with a security breach where customer or company data is exposed.
  • Cyber attacks: Protection against losses from attacks such as malware or ransomware.
  • Regulatory fines: Covers fines or penalties for failing to comply with data protection laws.

Professional Liability Insurance (Errors and Omissions Insurance)

Professional liability insurance can protect businesses that provide services or advice to clients. It covers:

  • Negligence: Claims against your business for mistakes or failures in professional services.
  • Misrepresentation: Protection if your business is accused of inaccurately representing a service or product.
  • Inaccurate advice: Coverage for legal defense if the advice or service leads to a client’s financial loss.

Directors and Officers (D&O) Insurance

D&O insurance is designed to protect the personal assets of corporate directors and officers, and it covers:

  • Legal fees: Costs associated with defending directors and officers from lawsuits alleging wrongful acts in their managerial roles.
  • Settlements and judgments: Covers settlements or judgments arising from lawsuits against directors and officers.

Safeguard Your Business

Choosing the right business liability insurance depends on your business’s nature, industry risks, and scale. Each policy addresses specific vulnerabilities, protecting against potential legal and financial issues. Work with professionals to help you find the business liability policy you need.

Learn more about our general liability insurance policies today.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical, or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.