Lawsuits can easily bankrupt a business. To protect your investment, here are two important policies that small businesses should own:
Commercial General Liability
A standard commercial general liability policy provides insurance coverage for lawsuits arising from injury or damage caused by your business practices or employees. It also covers infringement on intellectual property, slander, libel, contractual liability, tenant liability, and employment practices liability.
Overall, this type of policy is a protection against costly lawsuits that are grounded in the company’s negligence. For instance, a customer that gets physically harmed or becomes infected with a contagious disease in your store may decide to file a legal complaint against you. The owner of the building you’re renting may also sue you for destroying his/her property in a fire accident. These and other cases can be covered under your CGL insurance.
Otherwise known as errors and omissions (E&O) policies, professional liability insurance protects you in cases where the lawsuit involves your services. Your customer may complain that you were negligent or inadequate in performing your duties. Law firms, architectural or engineering companies, financial advisors, and other industries that collect a fee for their service generally need this coverage.
Determining which policies and amounts are suitable may be challenging without the guidance of a licensed broker. Consulting insurance companies can help you get enough information on your options and acquire sufficient protection for your business.