Liability insurance protects a business from losses incurred from legal actions such as lawsuits by reimbursing others for their losses. Before you begin gathering business insurance quotes for liability insurance, you need to understand what it does.
Unlike property or casualty insurance policies, which cover losses incurred by the business, liability insurance covers losses that others might suffer as a result of the business's actions, such as if a customer is injured in a slip and fall at a store. Finding a trusted business insurance company to write a liability policy for you can be one of the most important steps you can take when you are starting a new business.
Liability insurance like that carried by doctors and dentists is also necessary in industries or professions where customers could suffer losses because of the businesss normal activities.
How Liability Insurance Protects Businesses from
Liability insurance protects a business from lawsuits in two ways. First, liability insurance companies maintain a pool of money to pay legitimate claims against a business, thus possibly preventing legal action.
Second, liability insurance policies pay legal expenses such as lawyers fees in the event of a lawsuit. Liability insurance companies investigate claims against the insured and will not pay if the claims are frivolous. The companies also retain attorneys who fight frivolous claims in court.
Why Liability Insurance Is Necessary
Liability insurance is necessary because of the litigious nature of our society. Any individual who thinks that he or she has suffered a loss has the right to file a lawsuit against a business. There are also many attorneys, called personal injury lawyers, who make their living filing lawsuits against businesses. The rates reflected in a liability business insurance quote may seem high, but they may save your business a lot of money in the future.
Just as homeowners need home insurance, or renters need renters insurance, businesses, particularly those that deal directly with the public, need liability insurance. In most cases, people and their attorneys will try to hold the person or organization with the most money responsible for losses, even if that party is not actually responsible. The more profitable the business, the more it needs liability insurance.
Liability insurance may seem expensive but when compared to the cost of legal fees, it is usually a bargain. Without liability insurance, a business will have to pay claims and legal costs out of its operating budget. Once you have found a trusted business insurance company, you will have peace of mind in knowing that your business is covered in the event that the worst happens.
Types of Liability InsuranceYou can get business insurance quotes for the following types of liability insurance:
- Professional liability insurance protects professionals such as technicians or realtors from claims that may arise from their work.
- Malpractice insurance protects licensed professionals such as doctors from lawsuits over their work.
- D & O (directors and officers) liability insurance protects a corporation from lawsuits arising from the actions of its executives.
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