Commercial liability insurance safeguards your business from potential financial risks.
As a business grows and leaders look to the future, day-to-day operations aren’t the only indicator of coming success. It’s important for companies to take a strategic approach to the long term, considering business risks that could impact operations — and taking steps to mitigate their effects. Commercial liability insurance is an invaluable tool.
This approach to protection offers coverage against everyday accidents that have potential to result in legal concerns and financial loss. Here, BCH’s business insurance professionals delve into commercial liability insurance — what it is, the safeguards it offers and ways to select the right plan for your needs.
What is Commercial Liability?
Commercial liability is the legal responsibility a business faces for harm caused to clients, visitors, employees or others as a result of the company’s operations, products or services. Although the list of potential risks for which a business may be held legally responsible is extensive, common examples include:
- Third-Party Physical Injuries: If a third-party individual is injured on your company’s property by slipping on freshly mopped floors or the like, the business could be held liable and made to pay for medical treatment.
- Employee Injuries: Employees who are regularly on-site and involved in daily operations are at the highest risk of injury. From construction workers to office staff, your business could face workers’ compensation claims and increased insurance premiums for accidents incurred on the job.
- Property Damage: Possessions, properties and vehicles damaged by your company’s employees or practices could result in your business facing out-of-pocket expenses such as legal fees, repair costs and expenditures related to business interruptions.
- Personal and Advertising Injury: Businesses can be held responsible for non-physical risks that result in significant financial loss for an individual or fellow business. False statements could result in your business being sued for defamation, slander or libel. Meanwhile, copyright or trademark infringement, false advertising or stolen advertising strategies could lead to similar recourse.
How Commercial Liability Insurance Can Help
Commercial liability insurance provides coverage against risks such as those outlined above, acting as a safeguard for businesses against a variety of legal claims. Here is a detailed look at how this approach to business insurance offers protection in the event of accidents, errors, or unforeseen incidents:
- Financial Protection: Commercial general liability insurance covers the costs associated with legal defense, settlements and judgments against a business. Legal defense fees accrue as companies hire attorneys and contend with court costs such as filing fees, expert witness fees and more. If a business is found liable, commercial liability insurance will cover the costs of court-ordered settlements such as compensation for medical expenses, property damage and lost wages.
- Peace of Mind: Business insurance can provide the time and space businesses need to focus on company growth and operations without the added worry of potential lawsuits.
- Reputation Management: A strategic approach to commercial liability insurance allows companies to address claims promptly, reinforcing their dedication to customer satisfaction. When claims are managed efficiently, it reflects positively on a business’s public image.
Types of Commercial Liability Insurance
As with any decision that could have substantial impacts on operations, it’s important to approach commercial liability insurance in a way that suits your unique business. Here’s a high-level look at some of the more common liability insurance options available today:
- General Liability Insurance: This insurance offers protection against a broad range of risks, including bodily injury, property damage and personal and advertising injury. General liability insurance helps cover legal defense fees, court costs, medical expenses, property damage, lost wages and related expenses.
- Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, this option offers protection against claims of negligence, malpractice or errors that occur while carrying out business.
- Product Liability Insurance: This commercial insurance offers protection against claims related to product defects that result in injuries or damage.
- Cyber Liability Insurance: Companies often store sensitive customer information that could place them at risk of cyberattacks and data breaches — information such as credit card numbers, Social Security numbers, health records and driver’s license information. Cyber liability insurance covers the costs associated with recovering stolen data and making necessary updates following a breach.
BCH Tip: For more information about how commercial liability insurance can support your business, download our Commercial Liability Insurance Quick Sheet!
Factors to Consider When Searching for Business Insurance
When evaluating your company’s business insurance options, it’s crucial to understand the unique risks and requirements that come into play for your business — and the finer details associated with your chosen commercial insurance plan. Here are a few things to think through.
- Industry-Specific Risks: No two businesses are alike, and it’s important to incorporate coverage that protects against the unique obstacles that come into play with your line of work. For example, a retail store might prioritize coverage for shoplifting, property damage or liability for customer slips and falls. A manufacturing plant might prioritize product liability insurance to protect against claims of manufacturing defects, as well as coverage for equipment breakdown and worker injuries.
- Policy Limits: These caps define the maximum amount an insurer will pay for a covered claim. Assess the potential risks your company might face to ensure the policy limits are adequate, along with any projected risks your company could experience in the future as your business grows.
- Exclusions: Insurance policies often detail conditions and circumstances not covered by a particular plan. It’s important to be aware of such exclusions to avoid surprises. Common exclusions may include flood damage, issues brought on by natural disasters or those related to intentional acts. Awareness of such exclusions can help determine which insurance policy is best for your business — and whether supplementary policies are needed.
- Claims Process: Every insurance company operates differently. When evaluating your options, researching a potential insurer’s reputation for claims management can help ensure your business receives quality support. Familiarize yourself with the filing process, timelines and required documentation. Knowing what to expect can help minimize business disruptions and streamline the overall process.
The Role of Professional Business Insurance Firms
Navigating the complexities of commercial liability insurance can be challenging. This is where professional business insurance firms such as BCH come into play. Here’s how they can help:
- Expert Advice: Insurance professionals have the in-depth knowledge needed to assess the risks associated with your industry and business operations. They can identify overlooked hazards and recommend the best type of insurance coverage to ensure your business is protected.
- Customized Solutions: Insurance firms can create customized packages to meet your specific business needs. This prevents you from being overinsured and paying for necessary coverage — or being underinsured and lacking essential protection. Insurance professionals can also scale coverage as your needs evolve and your business grows.
- Ongoing Support: A good insurance firm will regularly review your insurance policies to determine whether your coverage is adequate or needs adjustments. Its team members will also be there to answer any questions that might arise. As your company expands its product line, enters new markets or faces regulatory requirements, such support helps ensure your coverage evolves alongside your business.
- Claims Assistance: In the event of a claim, it’s critical to have the support of experienced insurance professionals by your side. A professional firm will guide you through the claims process from initial reporting stages to the final settlement, ensuring you meet all requirements and deadlines.
Commercial liability insurance is vital to running a successful business. With an experienced insurance firm by your side, you can protect your enterprise against potential setbacks and reduce liability that could result in extensive financial loss. BCH’s commercial insurance professionals keep you covered with property and casualty insurance tailored to your unique needs — and ongoing support for the long term, too. If you have questions about any of the above, feel free to reach out. We’re here for you and your business when it matters.