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All You Need To Know About Business Liability Insurance

Operating a business is complex, as you have to deal with risks that are associated with it. You need to consider purchasing business liability insurance to protect your business from financial loss in the event of lawsuits or third party claims that are common in today's world of litigation. There are a number of insurance policies available in the market, but you need to purchase one that suits your business' needs and covers every risk that your business is likely to face.

In this article, we will discuss the importance, benefits, types, costs and claims covered by business liability insurance.

What is business liability insurance?

Business liability insurance protects business and its owner in case of claims made by third party for physical injury or damage to the property. The coverage includes damages due to lawsuit in addition to legal costs.

Types of business liability insurance

There are four main types of business liability insurance, purchase the one that suits your business' needs.

- General/commercial liability insurance: General liability insurance is also known as Commercial General Liability (CGL) insurance. This coverage protects your business against the lawsuit made by third party for bodily injury or property damage. Under this cover, CGL pays the medical expenses and legal fees.

- Professional liability insurance: This type of insurance protects professionals such as accountants, doctors, lawyers and engineers in the event of claims made by a third party or client for negligence, malpractice, errors or omission, while providing services to the clients. Professional liability insurance is a legal requirement for some professionals who are specialized in their respective fields.

- Product liability insurance: Product liability insurance protects against liability from the use of faulty or damaged products. It is meant for manufacturers, wholesalers, distributors, retailers, or any others who sell the product to the public. The liability may be on account of injuries or damage caused to the customer by using a defective product.

- Commercial auto insurance: This insurance covers both liability and property risks a business owner faces, while using cars, trucks, autos or trailers. During driving, if the company vehicle injures other people or damages their property, the policy covers the claims made by the third party. This policy may also cover your employees, using their personal vehicles for your business purpose.

Types of claims covered by liability insurance

The business liability insurance covers four basic claims made by the third party. They are:

- Bodily injury ' The liability covers the claims, if a person is accidentally injured by your company or its employees.

- Property damage ' This type of liability coverage pays for damages caused by you or your employee to others' property such as vehicles, house or furniture.

- Personal injury ' Personal injury is different from bodily injury. In personal injury liability, it covers the policy holder from third party claims on issues like slander or libel. This cover also includes damage to a person's or company's character, invasion of privacy or false arrest.

- False or misleading advertising injury ' An advertisement injury is a harm caused to a third party as a result of the policy holder's advertising efforts. The claims that are covered are slander, libel, copyright infringement and invasion of privacy.