What you need to know about general liability insurance
Liability insurance is explained simply as a type of insurance that protects the policy holder from the lawsuits of another person. Most people will be familiar with auto liability insurance; it's much cheaper than comprehensive car insurance because liability car insurance only has to handle the fees incurred to the other person and their property; the policy holder is not covered in any way. Comprehensive auto insurance pays for injuries to both parties along with property damage and medical expenses.
There are many types of liability insurance that are available to home owners, businesses and professionals. Each one is slightly different but they have the same main purpose: to protect the policy holder against the claims of a third party. For instance, general liability insurance insures businesses and homeowners against any claims from bodily harm or damage to property while on the policy holder's premises. If a rotten tree branch fell and hurt a person or damaged their property, general liability insurance would cover the fees and thus protect the policy holder from being sued.
Liability Insurance for Businesses
Business liability insurance takes this coverage even further and protects against lawsuits stemming from a loss or injury related to product or merchandise use. If a company sold a defective bicycle and the rider fell off and was injured, business liability insurance would cover the claim. Small business liability insurance is very important because it protects the business from workers who are hurt on the job, and prevents having to face a lawsuit. While paying insurance can be expensive, just one lawsuit could be enough to shut a small business down for good if they were uninsured. This type of insurance may also be referred to as workers compensation insurance.
Professional liability insurance is designed for doctors, lawyers, architects, real estate agents and accountants, and is associated with medical malpractice or errors and omissions insurance. Professional liability policies protect the professional against lawsuits that come as a direct result of advice or services that led to injury or monetary loss. These professionals are at a higher risk of lawsuits because they are held to a higher degree of scrutiny by the law, so this coverage is vital to them.
While it is mandatory throughout North America to have liability insurance on your vehicle to be legally able to drive, most other forms of liability insurance are optional. Weighed against the immense costs of litigation today, having the right liability insurance for your business is a smart way to protect against unforeseen circumstances.