Commercial liability insurance helps protect businesses in instances where a business is held responsible for another party’s injury or property damage. Because there are many kinds of incidents that can result in injury or property damage, insurers offer many different types of liability coverage. Here are some of the most common ones.
General Liability Coverage
General liability coverage is so named because it offers broad protections. Its most well-known protection is against injuries that third parties – that is, customers, clients, suppliers and other non-employees – sustain on company property. For instance, if a customer slips on a store’s wet floor and injures themselves, general liability coverage will likely cover the claim.
Injuries sustained by employees and independent contractors that are hired by a business usually aren’t covered under general liability. These injuries are normally covered by workers’ compensation insurance instead.
General liability coverage also provides protection from claims that accuse a business of causing nonphysical injury. Slander, libel and false advertising claims, which argue that a third party’s reputation or finances have been harmed, are also usually covered by general liability.
Because general liability coverage offers broad protections against risks that many businesses face, it’s used by many different businesses. Restaurants, taxi companies, manufacturers, retailers and many other types of businesses all utilize general liability coverage.
Product Liability Coverage
Product liability coverage provides protection against claims arising from damage or harm caused by a business’s products. For example, if a product burns or cuts a customer, the claim would probably be covered by product liability coverage. Coverage may extend to design flaws, manufacturing issues and other product failures.
Product liability coverage is usually purchased by businesses that make, transport or sell products, as any of these businesses may be held accountable if a product causes damage or injury. This, of course, includes toy makers, wholesalers and retailers. It also includes businesses like restaurants and food trucks which sell food as a product.
Professional Liability Coverage
Professional liability coverage provides protection against claims related to mistakes that are made when practicing a profession. Coverage may extend to both bad advice that’s given and errors that are made while working. For example, both unsound financial advice and an incorrect operation might be covered by the right professional liability coverage.
Professional liability coverage is used by all kinds of professionals, from doctors and lawyers to landscapers who offer advice on how to shape a lawn. Each professional who purchases this coverage gets a policy that’s tailored to their particular field and risk exposure.
Professional liability coverage is sometimes called “malpractice coverage” and “errors and omissions coverage,” depending on the profession a policy is written for.
Directors’ and Officers’ Liability Coverage
Directors’ and officers’ liability coverage offers unique protection for directors and officers of organizations, as they can be held more accountable than regular members. This coverage provides protection against claims related to the actions directors and officers take while in charge of an organization they lead.
Directors’ and officers’ liability coverage is purchased by businesses for C-level executives, by nonprofits for board members and by other groups that have high-ranking leaders. Although the coverage provides personal protections for leaders, it’s usually paid for by organizations because the protections are for risks leaders assume by serving the organizations they lead.
Pollution Liability Coverage
Pollution liability coverage specifically protects against claims that accuse a business of polluting the surrounding environment. This may include a major oil spill, or it can be a much smaller claim like spilling pesticides into a roadside creek.
Pollution liability coverage isn’t as widely needed as general or product liability coverage. There still are several businesses that may need this coverage, though. Landscapers that use chemicals, freight companies that transport hazardous materials and other businesses that regularly use items that would pollute the environment may need this protection.
For help finding the commercial liability insurance that your business needs, contact us at Lanham Agency.