Liability Insurance Policy | What Does Liability Insurance Cover?

What Does a Liability Insurance Policy Cover?

As a business owner, a liability insurance policy should be an essential part of your protection plan. Liability insurance helps protect your business from claims that can come up during normal operations, such as:

Bodily injuries
Property damage
Advertising injury
Reputational harm
Mistakes in professional services

Liability claims aren’t uncommon, and they can get costly. In fact, few small businesses have the resources to survive a significant liability claim. That’s why it’s important that you get the right type of liability insurance for your business. This coverage can help pay for:

Medical bills
Repair or replace costs if you or an employee damages property
Legal costs
Settlements and judgments

What Do Liability Insurance Policies Not Cover?

Liability insurance doesn’t cover every kind of claim your business may face. This insurance won’t help your business if you:

Damage your own business property
Do an illegal or malicious act intentionally

Common Types of Liability Insurance

There are different kinds of liability insurance you can get to create a comprehensive protection plan for your business. These include:

Our specialists are here to help you find the right coverage for your business. If you know which coverage you need, we make it easy to get liability insurance online. Get a quote and start protecting your business today.

How Does a Liability Insurance Policy Work?

If you have a liability insurance policy, your insurer helps pay for covered claims and related expenses. How much your insurance company covers and the amount you’re responsible for depends on your specific policy.

Let’s say you have a general liability insurance policy. While working at your client’s house, your employee accidentally breaks one of their windows and the client sues your business. Your insurance requires you to pay a deductible before the property damage coverage in your policy goes into effect to help repair or replace the windows.

For professional liability insurance, your insurer can help pay for your legal costs if someone sues your business for a mistake in your professional services. So, this means your insurance company can help cover the legal costs to defend your business, as well as settlements and judgments. Be aware that some states require certain businesses to carry professional liability insurance.

With workers’ compensation insurance, you’ll have to file a claim with your state and insurer if an employee gets hurt or sick from their job. If approved, your insurer gives benefits to your employee to help them recover. This can include:

Help paying for their medical bills and ongoing care costs
Replacing some of their lost wages
Disability benefits

Your commercial auto liability coverage can help protect you on the road if you’re driving for work. For example, you’re involved in a covered accident. Your insurance likely includes bodily injury liability and property damage liability, so your insurer can help pay for damages up to your coverage limits.

How Much Is Liability Insurance for Business?

Every business is different, so general liability insurance costs and other liability insurance rates vary. Insurance companies look at different factors to help determine your cost. These can include your:

Type of business
Business location
Years in business or industry
Risk exposure
Deductible
Liability limits

Frequently Asked Questions About Liability Insurance Policies

Is a Liability Insurance Policy Required by Law?

When it comes to laws for liability insurance, it varies by state. Most states require employers to carry workers’ compensation insurance. Others require certain businesses to have professional liability insurance. Check your state’s insurance requirements to make sure you have the right coverage. If you don’t, your business may have to pay a penalty or fine and you can also face criminal charges.

Is Business Liability the Same as General Liability?

Yes, a business liability insurance policy is the same coverage as general liability. This coverage is also referred to as commercial general liability insurance. While they’re different names, they refer to the same product.

What’s the Difference Between Full Coverage and Liability Insurance?

Full coverage insurance refers to car insurance coverage. Generally, full coverage means you have insurance that meets your state’s requirements, as well as comprehensive and collision coverages. This means your policy has bodily injury and property damage liability insurance, as well as coverage to help pay for damages to your car.

What Does a Business Owner’s Policy Cover?

A Business Owner’s Policy (BOP) combines three essential coverages that many business owners need:

General liability insurance to help cover claims your business caused a bodily injury or property damage.
Commercial property insurance to help protect your owned or rented business building and equipment.
Business income insurance to replace lost income if you can’t open because of covered property damage.

You can tailor your BOP to meet your business’ specific needs. We make it easy for you to add different types of liability coverages to add more protection to your policy.

Get a Quote for Liability Insurance Online

With several options of liability insurance to choose from, it can be difficult to know which coverage you need. We’re here to help. We have over 200 years of experience and have helped over 1 million small business owners get the protection they need. Get a liability insurance quote today and get the right coverage at the right price.