FRIDAY, MAY 21, 2021
Liability for commercial accidents is one of the biggest concerns of any business owner. Just a single accident involving a third party (I.e. a customer or vendor) could lead to the business facing tens of thousands of dollars in legal fees and settlements, after all. 
To protect yourself against the ramifications of liability lawsuits and related costs, it’s imperative to invest in quality commercial liability insurance. Small businesses will often find this coverage within their business owners policy (BOP), which is one of the easiest ways for smaller operations to get their essential benefits. However, the liability benefits offered by a BOP are often best augmented with other liability policies. Let’s take a closer look at how to get optimized coverage.
General Liability Insurance Within BOPS
A business owners policy (BOP) automatically includes general liability insurance. General liability insurance covers claims against your business concerning bodily injury, property damage and personal or advertising injury to third parties.
For example, if someone is injured on your business’ property, general liability insurance can help cover the victim’s related medical bills. If that party were to sue you over their losses, then your general liability coverage can also cover your legal expenses.
General liability is only the first and most basic liability insurance coverage, however. It is expandable with the help of numerous more specific liability benefits.
Getting Other Liability Benefits
Depending on your business’ industry and other factors, you may need to add liability insurance alongside the benefits provided by your BOP. These include options like:
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Professional Liability: This insurance provides coverage if a claim is filed due to an act of professional negligence that results in monetary loss for their client. This insurance is important for lawyers, medical professionals, accountants and financial advisers.
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Data Breach Coverage: If a data breach occurs, data breach insurance can help cover the cost of hiring a public relations consultant, legal fees that arise from claims due to the breach, and extortion payments.
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Crime Coverage: Most insurance excludes criminal acts that occur from an inside actor, so crime insurance provides coverage if an employee or partner steals money from the company.
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Cyber Liability: Cyber liability helps in instances where personal client information is lost or stolen due to a cyberattack or similar incident. This insurance is crucial for a lot of businesses, since most information is held online today.
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Inland Marine Insurance: A commercial auto insurance policy won’t always cover expensive equipment while it’s being transported. Inland marine insurance provides coverage for loss or damage that occurs to equipment or third-party property in transit. So, if you wreck one of your vehicles while transporting someone else’s belongings, then this coverage can protect you.
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Liquor Liability Insurance: This covers damages and injuries caused by someone who recently purchased alcohol at your business. If you own a gas station and someone purchases beer, for example, and later that night gets into a drunken brawl with another person outside and causes injuries, liquor liability insurance can help cover responsibility your business may face.
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Umbrella Insurance: This insurance covers gaps left over by your other liability insurance policies.
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Directors and Officers Liability: This covers the key employees of your business in case of a claim regarding their activity under your employment. This can often include EPLI coverage, or Employment Practices Liability Insurance. EPLI covers such claims as against directors or officers regarding discrimination, sexual harassment, wrongful firing or hiring, failure to promote.
Does Liability Insurance Cover Lawsuits?
Part of liability insurance helps cover the cost of a lawsuit. If someone is injured on your business’ property and decides to sue, general liability insurance can help pay for the related expenses such as court fees, defense costs and settlement expenses.
For example, say that you run a hospital and one of your top surgeons is accused of making a mistake during surgery, causing the victim to undergo another expensive surgery to correct the issue. The victim decides to sue your surgeon and the hospital for their pain and financial loss. This incident would be covered under professional liability insurance, known in this case as medical malpractice insurance. It can help with the settlement to cover the victim’s medical bills and financial loss as well as protect your surgeon and hospital from the expensive lawsuit.
How Much Liability Insurance Should I Have On My BOP?
Every business is different, which is why different limits of liability coverage are available. It is important to speak with your insurance agent about the level of risk facing your business. The more risk you face, the higher you will want to set your liability insurance limits.
BOPs are flexible to allow you to tailor the policy specifically for your business’ needs, but they are still only designed for small businesses in low-risk industries. If you have a large business or believe you operate in a high-risk industry, speak to your insurance agent about a commercial package policy (CPP) that may cover your needs more appropriately than a traditional BOP.
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