Liability insurance is an essential form of protection for businesses of all sizes. This insurance protects your business against financial losses that can occur as a result of third-party claims of bodily injury or property damage.
Liability insurance is a part of the burgeoning business insurance industry, which in the USA is valued at $ 240 Billion, as per estimates by Market Research firm IbisWorld.
We’ll discuss some of the most common types of liability insurance and how they can help to safeguard your business.
- General Liability Insurance
General liability insurance protects businesses from a variety of claims, such as bodily injury and property damage. In the United States, it is a common form of insurance for businesses of all sizes and types.
General liability insurance covers claims of negligence, which means that it can help protect a business if it is found to be at fault for an accident or injury that occurs on its property or as a result of its products or services.
It can also help cover the cost of legal defense in the event that a business is sued. It is not required by law, but it is a common requirement from customers in contracts or landlords for leased spaces.
2. Vendor Liability Insurance
Vendor liability insurance is an important type of coverage for businesses that sell goods or services to other businesses. This type of insurance is designed to protect against claims of injury or damage caused by the goods or services sold by you.
It may include claims of product defects, faulty workmanship, or other issues that may arise due to the goods or services that you provide. Check verified online resources to know more about vendor liability insurance before finalizing an insurance provider. Choose a provider who has vast experience in this particular sector and great customer reviews.
Vendor liability insurance covers part of the costs of legal action taken against your business. This includes the cost of defending your business in court against the claim. It may also cover the cost of any settlements or judgments that may be awarded should the legal battle go awry.
- Product Liability Insurance
Product liability insurance is designed to protect your business against claims of injury or damage caused by a product that you manufacture, distribute or sell.
A very common example of a product liability lawsuit would be the Tylenol Lawsuit. Many people are planning a mass tort class action lawsuit against Johnson & Johnson for failing to warn consumers regarding the probability of newborns being born with Autism or ADHD when their mothers consumed Tylenol in the prenatal period.
If a customer is injured in some way or their property is damaged by one of your products, product liability insurance steps in. It can help the business to defend itself from potential claims.
- Professional Liability Insurance
Professional liability insurance protects businesses that provide professional services. This includes industries such as consulting, legal, accounting, and architecture.
It can help to cover the costs of legal action taken against your business for alleged errors or omissions in your work. This is why it is also known as errors and omissions insurance.
- Cyber Liability Insurance
In the event of a data breach or cyber attack, a Cyber Liability insurance plan will protect your business against financial losses. Its main utility lies in its ability to cover the costs of legal action taken against your business, as well as the cost of any resulting settlements or judgments.
Additionally, it can also cover the cost of notifying affected individuals, credit monitoring services, and cyber extortion events.
The median cost of cyber liability insurance can be around $ 140 for a small business, according to a Forbes report. The same report quotes a survey by the Small Businesses Administration or SBA where 88% of small business owners feel they can face a cyber attack at any point in time. Thus, it makes sense for your small business to have a cyber liability insurance policy in place.
By understanding the different types of liability insurance available and the coverage they provide, you can make an informed decision about the protection that your business needs. From General Liability to Vendor Liability, Cyber liability, Product liability, Professional Liability, and so on.
Choosing the right type of liability insurance for your business can be a difficult task. It’s important to consider the unique risks that your business faces, as well as the size and scope of your operations. Carefully assessing the different types of liability and consulting with a professional insurance broker can help a business to make an informed decision about the type and amount of coverage it needs.