Liability Coverage
Liability Insurance Coverage
The truth is that modern culture has bred a litigious society. People can and will sue for nearly anything, even if it isn’t actually your fault. You can read about frivolous lawsuits every day. Some of these cases are idiotic, but no matter how baseless a lawsuit is on the merits if the court issues a judgment against your business you could be out thousands or even millions of dollars in a true judicial massacre.
You must have liability insurance to protect you from those sorts of miscarriages of justice where your company was not in any way at fault, but, even more importantly, you need good well thought out liability coverage for those unlucky times when the incident it is your fault.
Do I Need Liability Insurance Coverage?
If you have a business of any size and you are not perfect the answer is probably, “Yes.” No one is perfect. Articles often discuss frivolous lawsuits, but the truth is that courts have gotten lots tougher on frivolous lawsuits in the last forty years.
What you ought to lose sleep about if you don’t have liability coverage is that day when anything that can fail does fail. That’s what happened on the Challenger and that what happened at the Little Big Horn and it can happen to your business. What’s the worst case scenario? Have you ever really thought about it?
Do you run a business where if one of your employees did not do their job correctly that a customer, or even worse a random citizen, could be injured or even killed? How many times per day do your employees perform these possibly lethal tasks?
If you don’t have liability insurance coverage you’re blindly trusting that those employees will succeed exactly right each and every time? Do you trust your employees with that much responsibility?
Slip and Fall Insurance Coverage
General liability insurance is typically part of an insurance package. It provides coverage in the case of lawsuits due to bodily injuries incurred by customers, employees, or guests while on your property or property damage caused by you or your employees. General liability is by far the most common, but there are four others that are more tailored to the specific needs of certain customers. This generally covers slip and falls and similar accidents, but also a variety of other accidents.
Malpractice Insurance Coverage
Professional liability insurance is a special type of liability insurance coverage. Professional liability protects professionals like doctors and lawyers from claims against them. One example of this type of liability is malpractice insurance. Doctors in particular can testify to the rising amount of lawsuits filed against their profession.
Product Liability Coverage
Product liability is another type of insurance that exists; its purpose is to protect businesses from claims on defective products they have manufactured. One famous example of this is the cigarette industry. Philip Morris is a major manufacturer of cigarettes, which aren’t defective but are widely known to be terrible for your health.
From manufacturers of toys and baby products to car manufacturers, many have benefited from the protection of product liability.
Sexual Harassment Insurance
The newest type of liability insurance is employment practices liability, which usually includes sexual harassment insurance. This insurance protects employers from employees, former employees, and business associates who file claims against them regarding violations of legal rights. Lawsuits filed because of sexual harassment or discrimination have dramatically increased in the past decade, and have made this new type of insurance necessary. If you are a business owner and do not have some type of an employment practices insurance policy, it would be a good idea to look into it.
Board of Directors Insurance
The last type of liability insurance, directors and officers (D&O) liability, has recently become a major component of insurance within the corporate structure. An overwhelming majority of Fortune 500 companies keep D&O insurance due to the significant increase in lawsuits in the past few decades. Originally directors and officers liability was created to protect the heads of companies from personal financial ruin. These days D&O protects not only the directors and officers of a company, but the company itself from the many and sometimes rather frivolous lawsuits that are filed.
How Much Liability Insurance Do I need?
“Precisely how much coverage do I actually need,” is usually the very first concept that comes to mind when any businessman, attorney, or executive considers about liability insurance and naturally the smart reply is, “You know, that just differs,” because every business is very different.
There are a variety of things to consider when shopping for liability insurance, but here are the basic principles:
1. What size is your organization? It may not be really rational, nevertheless the bigger your company the more insurance you will need comparable to smaller companies, because with a lot more activities there exists, all other issues being equal, an increased possibility of a tragedy. What’s more, a large, flourishing corporation that appears to manage to pay a judgment is a much more desirable target for litigation compared to a tiny start-up business that apparently doesn’t have any other assets than a ’81 Jeep Cherokee and six screwdrivers.
2. Are physical injuries a regular challenge in your industry? There are a number of sorts of liability, for example economic liability, but none of them are more critical than the liability that occurs when one of your employees, consumer, or, most inopportune of all, a member of the public at large is killed or hurt, as a result of actions of you or your employees.
3.Just how much is it possible to mitigate your financial risk without negatively affecting your core business? You should consider every job that you or your staff perform and see if you’re able to discover a less dangerous solution to achieve precisely the same purpose. Clearly, some risks are innate to certain business, as an example fishermen always have to be concerned about drowning, and some solutions are very costly to really put into practice, but sometimes you will discover a concept that simultaneously decreases your liability and raises your productivity.
4. How expensive are judgments in your industry? This varies greatly from industry to industry and from state to state, but a good insurance agent can give you some direction.
5. Just how much insurance can you afford? This is actually the basic issue of all insurance. No one can really afford to insure against all possible risk. How do you balance the competing needs of risk and the expense of protection? There is no simple answer to that question. Insurance companies will provide you with a lot of information, but they will helpfully suggest you insure against everything, because they are ultimately trying to sell insurance. There isn’t any correct solution. Well, unless you lack ample liability coverage at the time you want it. That is the quandary.