Sunday, September 10, 2023

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Understanding the Different Types of Liability Insurance and How They Work

Whether small or big every business is exposed to a range of liabilities. If not managed properly, any form of liability can subject your business to substantial claims. To help cushion your business, every business needs liability insurance to act as an asset protection plan. Having substantial coverage can protect your business from claims with potential lawsuits or legal liabilities. However, since every business has unique risks, the level of coverage you need depends on the type of business you are running. While non profit volunteer insurance can cushion your business from overpaying for your insurance, this article explores different types of liability insurance coverage you need to consider when looking for a policy and how these policies can help protect your business.

Professional Liability
Professional liability insurance (PL) covers claims that your business made errors in the services you provided. If your client sues you for giving them inaccurate financial advice and sues you because they lost money, PL insurance can help cover your legal defense costs. Therefore if you provide professional services to customers it would be important to get professional liability insurance.

Employer Liability
Provided the business is up and running, employer’s liability and workers’ compensation are mandatory coverage. Employer Liability protects the business against liabilities arising from unforeseen circumstances such as injuries or worst still during the death of an employee. Depending on the state of your jurisdiction, it may be mandatory by law to buy workers’ compensation coverage. But it’s still a good idea to get this coverage even in a situation where it is not the law in your state.

Comprehensive general liability
From small to large businesses, general liability policies are tailor-made for any business. The policy covers different types of general liability claims that your business caused. Such claims include bodily injury, medical payments, property damage, advertising injury, premises, operations liability, etc. In this case, the Insurers provide coverage for compensatory and general damages for lawsuits. However, It’s important to note that general liability insurance doesn’t cover property damage be it your business or your employee’s property. In fact, this type of protection should be a component of any home or car insurance policy and not only for companies.

Director and officer liability coverage
Officers in charge of a business are subject to specific responsibilities. They are also responsible for their own actions and need to act fairly and diligently in the best interest of their business. Director and officer liability coverage cover a company’s board of directors against liability should the company be sued. Generally, this policy covers policyholders against financial consequences that mainly arise from their activities as managers.

For any business, it’s not whether or not you need liability insurance coverage, but which types will be more suitable for your business needs. Now that you understand different types of liability insurance, you can be sure to make the right protection for your business. With several insurance companies in the market, you can get the right non profit volunteer insurance cover that meets your company’s needs. That said and done, don’t hesitate to protect your business against the threat of claims and lawsuits. Take the right liability insurance today and have your business protected.

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