One challenge that you never want to face in your business is a lawsuit brought by a disgruntled customer. They might allege that your mistakes or negligence caused them harm, and they might demand that you pay for their trouble. Because you don’t want to face an insurmountable loss due to the ramifications of a lawsuit, you need to tailor your insurance benefits to provide assistance.
A specific type of commercial insurance known as liability insurance can come to your aid under these circumstances. However, liability insurance is not one policy, which is why you often need multiple types of coverage. Here’s how this very important benefit works.
Your Business’s Legal Liability
When someone visits your business or engages your services, they expect you to do your job without a hitch. Therefore, if something were to go wrong, then they might expect compensation and sue you in order to get it.
A lawsuit is nothing to treat flippantly. They could lead to significant legal costs, even if the claim never makes it to an actual courtroom. Furthermore, the costs of a settlement might be astronomical, and under the circumstances your business might not be able to adequately afford the costs of restitution.
For example, if someone were to fall in your business, sustain an injury, and then sue you, they might request restitution for:
Pain & suffering
If your business was liable for the injury (meaning you were ultimately responsible for it) then you might have to repay this person. It’s easy to see how costs like those above could lead to tens of thousands of dollars in losses for the business, and you want to be able to protect yourself against them. At this time, your commercial benefits can play a lifesaving role.
The Benefit of Liability Insurance for Lawsuit Costs
If you want protection against the ramifications of lawsuits, then the benefit to enroll in is liability coverage. While there are many forms of this benefit, they’re all designed to help the business make restitution to third parties who suffered harm as a result of their mistakes.
Coverage needed by most businesses includes:
General Liability Insurance: Covers costs of bodily injuries, property damage, product injuries and personal injuries (libel, slander) to others.
Errors & Omissions Coverage: This benefit pays when your professional advice or services cause clients a financial loss.
Directors & Officers Coverage: Should company officers become the personal target of a business lawsuit, this coverage will protect their personal assets from loss.
By filing against liability coverage, you’ll be able to have your benefits pay for the costs of lawsuits, including both settlements and your legal fees, rather than trying to dig into your financial reserves to do so. Therefore, coverage is instrumental in helping you preserve your financial security even though your mistakes have caused you to face challenges.