Why Business Liability Insurance?
Commercial liability insurance or general liability insurance or business liability insurance are all terms meaning the same thing. They will be used interchangeably below.
Today’s society is increasingly litigious and even the smallest companies need to protect themselves against 3rd party (other people) claims. Therefore, commercial liability insurance is a very important decision to make. General Liability insurance protects a company’s assets if it is sued for causing property damage or personal injury to a third party.
You can purchase general liability insurance on its own or as part of a businessowner’s policy (BOP). A BOP policy combines different types of insurance coverages into a single policy. BOP policies are usually cheaper and they are a more efficient way of obtaining commercial liability insurance, if a company is eligible.
How does Business Liability Insurance work?
You choose a limit. Let's say that the limit you choose is a $3 million occurrence. If a business with a $3 million occurrence limit on its general liability insurance policy were to be successfully sued for $3.75 million, the insurer would pay the $3 million. The company would be responsible for the $750,000 balance.
It is usually a very good idea to choose to buy umbrella insurance to cover such situations. The Umbrella policy extends limits where general liability insurance coverage ends. It provides additional coverage that standard business liability insurance policies do not cover. It also extends over the commercial auto policy and workers comp.
So how do you decide how much commercial liability insurance your business needs? It usually depends on a couple of factors:
Consider the amount of risk associated with your business. What are the chances that you could get sued for a large claim? Your insurance agent can help you go over the possible scenario’s so you can choose the right amount of general liability insurance.
Some states and some area’s in some states have a history of awarding high damage amounts to plaintiffs claiming personal injury. If you are a business that operate in such a state, you should consider carrying higher commercial liability insurance.
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Click here Commercial Property Insurance
Click here Workers Compensation Insurance
Click here Commercial Umbrella Insurance
