It is a commercial insurance that protects a business when it is legally sued. Liability insurance covers the damages, costs and other legal fees in case of a lawsuit. Liability insurance will not cover the lawsuits that arise from a breach of contract, illegal termination of employee, sexual harassment at workplace and race/gender issues.
General Liability Insurance:
General liability insurance protects businesses from a wide range of liability exposures. These liability issues include accidents on the business premises or the services provided by the insured organization and products sold by the insured. The coverage provided by general liability insurance quote includes all the expenses incurred as a result of a lawsuit, even if the lawsuit is proved to be true. The coverage also includes the cost of settling the claim or paying amounts ordered by a court. General liability insurance quotes also covers accidents caused by the business owner or the employees while on an official business, and losses as a result of accidents on the business premises. The general liability policy contains specific exclusions for claims that would be covered by other insurance policies, such as automobile liability, workers compensation and professional liability.
A proof of general liability insurance quote should be supplied before leasing a building for conducting business. Before buying a general liability insurance quote, the business owner should assess the risk factors affecting the business and develop an effective loss prevention method as this will affect the premium. Premium for general liability insurance quote varies according to the industry type, the coverage offered and the risk factors involved. The deductibles and the coverage limits in terms of money involved also depend upon the industry and the coverage required. General liability insurance quotes help the business owner in the event of a suit filed against him for causing any injury or damage. This encompasses losses and damages arising on his business premises. The losses may include bodily injury or damage to the property of the person filing the suit. General liability protection could extend to:
Bodily injury caused to a person
Property damage
Product liability: The general liability insurance could protect the businessmen for the damages caused to a person's product.
Contractual liability occurs when a people enters into a variety of contracts.
These contracts are also referred to as comprehensive commercial liability. The business owners should avail themselves of general liability insurance quote after considering the risks associated with their business. Manufacturing businesses manufacturing heavy or dangerous machinery may face a lot of risks. The businessmen should also think of the state in which they carry their business and the rules pertaining to that state before availing of liability insurance.
Directors and Officers Liability Insurance:
The directors and officer's liability insurance protect the directors and the officers from personal liability. The personal liability arises if any wrongful act is committed in the director's capacity. Many insurance companies offer directors and officer's liability insurance. The insurance covering the directors or the officers may not protect them in every situation as there are cases when the financial loss of the company will have to be incurred by the directors and the officers. Many insurance companies have policies to fill these gaps and save the assets of the officers and the directors.
Non-office employees have also been covered under this act. Many companies have proved to be vulnerable to directors and officers liabilities where lawsuits have been filed against them. The public limited companies are urged to apply for directors and officers liability insurance as law suits against the directors and the officers have been on the increase. The directors and officers liability insurance safeguards the directors and officers from the liabilities, which arise as a result of the corporate positions they hold.
Directors and officers liability insurance (D&O insurance) covers the lawsuits arising from known and intentional acts by an organization's board of directors. With increasing number of lawsuits every year, directors and officers insurance gives financial protection to directors and officers of the company if they are sued. Initially DO insurance was framed to protect the personal financial position of the directors of an organization. It has now evolved to cover the organization itself from various liabilities. Almost 95% of the Fortune 500 companies have the protection of DO insurance since 31% of all business firms expect at least one claim to be made against their officers or directors. It is surprising that companies with assets greater than $10 billion had a 63% chances for a litigation to be made against their directors. Claims against technology companies have drastically increased in the recent years, especially due to fluctuations in their stock prices. A directors and officers liability insurance policy has two parts
Insuring Agreement A- This policy generally covers the directors themselves for lawyers' costs when a claim is made against them for a wrongful act.
Insurance agreement B - Covers corporate reimbursement for claims against the corporate when the corporation indemnifies its directors and officers for any claims made against them.
In addition to the above-mentioned policies, D&O insurance also offers specialized coverage based on an industry's unique need. The directors and officers of a non-profit organization may require a different coverage than the directors of banking or a financial corporation. DO insurance does not cover claims that involve the insured's dishonesty and conscious violation of contract/law. Any litigation associated with the profession of the director or the officer will not be covered by this insurance. If the director is a professional banker and the litigation against him involves his duties as a banker, that litigation is not covered by DO insurance. Directors and officers insurance also exclude Insured Vs Insured litigations, where one D&O insured corporation sues another similarly claimed corporation.
Professional Liability Insurance:
Professional liability insurance is required for all organizations, businesses and professionals providing any kind of service. This insurance protects both the service provider and the client. If the client sues the provider, professional liability insurance covers the professional's personal assets by paying legal fees involved and also compensates the client who has suffered damages. Professional liability insurance was initially created for doctors, lawyers, CPAs, architects and engineers but recently its coverage has broadened to include professions and professionals such as allied healthcare, mental health or substance abuse counselors, teachers, business managers, technology consultants, software designers, public relations professionals and environmental consultants. Some professions require that its practitioners have professional liability insurance before they are allowed to practice.
Professional liability coverage can either be on 'occurrence' or 'claims-made' basis. Claims made policy covers professionals from incidents that arise from treatment provided after their policy's retroactive date but reported while their policy is still in force. The occurrence policy covers the insured from incidents that take place when the policy is in action, irrespective of when the claim is being reported. The premium for a professional liability policy depends on many factors -- the profession, the chances of a claim being filed against them, potential severity of the claim, number of years in practice, number of professionals covered, annual revenues from that profession, location of the business and claims history of that professional/organization. The premium also depends on the coverage limit required by the individual. Many insurance companies offer a variety of premium discounts such as newly licensed or certified discount, risk management discount and group discount. Malpractice insurance and errors & omissions insurance belong to the professional liability insurance category. Malpractice insurance covers professionals from services rendered that have backfired. Malpractice insurance is important for medical and health-related professionals and interestingly hairdressers and dog groomers too. Errors and omissions is for professionals whose service is providing professional advice.
