If your business faces a claim, liability insurance can help cover legal fees and expenses. That’s why it’s a good idea to have a general liability policy in place.
Liability coverage protects your business from lawsuits arising from a variety of events, such as a person getting injured while on your property or a product going defective. It also covers libel and slander claims.
Coverage
Liability insurance covers you for liability – the costs you might be liable for if a third party sues you. These costs include medical expenses, lost wages and legal fees.
General liability policies also cover property damage and injuries to other people, such as if a customer slips on your wet floor or a package delivery person breaks their arm in an accident. It also helps cover damages for reputational harm and errors in advertising.
A split limit policy can pay up to $25,000 bodily injury per person and $50,000 per accident for claims arising out of a single accident, for example.
Another common type of liability coverage is an umbrella or excess policy that covers liability over and above the limits on your base policies.
This can help keep your business financially stable if you’re sued by a client or competitor. Make sure to check your policy carefully to ensure you have the coverage you need.
Limits
Liability insurance limits are a way for you to determine how much your insurer will pay in the event of a claim. These limits vary by type of coverage and your state’s requirements, but all policies have some sort of limit.
In some cases, you may have an option to increase your policy’s limits, which can be a good idea if your assets are at risk. However, be sure to understand the limits before deciding how much you want to spend on coverage.
For example, let’s say you have split liability auto coverage with 25/50/25 limits, meaning $25,000 for bodily injury per person and $50,000 total. If Liability Insurance Agency cause an accident that injures three people, each with medical bills of $10,000, your car insurance will cover these claims because they stay under your limits for bodily injury and property damage.
Exclusions
Liability insurance protects you from third-party liability for damages that you cause. However, there are certain risks that your insurance policy won’t cover.
These exclusions are set out in your policy to create a balance between coverage for fortuitous losses and the need to remain solvent to pay claims that occur.
Specifically, these policies don’t include coverage for any bodily injury or property damage to your business that you may cause by your own negligence. This excludes things like injuries from slip and falls, accidents that happen on your premises, and even accidents that result from using your products.
Another important exclusion is coverage for any damages to your business that you may cause as a result of a violation of antitrust laws. These laws are designed to prevent companies from colluding or price-fixing for their own benefit.
Claims process
The claims process is an important part of the overall insurance industry. It ensures that claims are processed correctly and in accordance with regulations.
Claims are submitted by insureds who have experienced an incident, such as an auto accident or a property damage situation. They may also be made by third parties who are harmed by the actions of an insured.
Once a claim is received, the insurer will verify that the insured has complete information and compares it to the policy. This is called an “inspection.”
After the insurance company confirms that the loss is covered and that the deductible is met, it will send a claims adjuster to assess the full extent of damages.
During this phase, it’s important to remain in touch with the insurance company throughout the claim process. Failure to do so can cause delays or even result in a denied claim. This can impact future premiums and cost the business money.