What Types of Liability Insurance Are Necessary?

Business owners face numerous risks anytime they open their doors. It's possible that business liability insurance may be one of the most important investments a company can make. Yet, many small business owners are uninsured. Liability insurance protects a business from mistakes, accidents and other risks that could otherwise financially bankrupt the organization. The following are the most commonly sought after types of liability insurance.

General Liability Insurance

A basic plan that nearly all businesses should have is Houston general liability insurance. It adds a layer of protection to cover any type of hassle related to accidents, negligence claims, or injuries. This policy provides the business with protection from an assortment of risks including the following:

• The cost of defending against a lawsuit
• Property damage costs
• Costs related to bodily injury claims
• Costs related to someone's medical expenses being paid
• Libel defense charges
• Costs associated with defending against slander
• Cost of settlement bonds
• Cost of judgments

The risks for this type of insurance are very clearly present. If a customer falls on the property, this policy protects the company. If an employee makes claims that are not accurate and someone sues the business, this policy may help.

Product Liability Insurance

Most companies sell a product. That product, when made, distributed and used properly gives some type of benefit. Yet, mistakes can happen. Product liability insurance provides the company with protections necessary for any organization that manufactures, distributes, sells, or wholesales any type of product. It is a type of liability policy protecting the company from having to pay for losses. This generally has to do with defects that cause a person harm.

Product liability insurance is necessary for most organizations selling something. However, the type, amount, and the need for it range significantly between one company and another. For example, a company selling auto parts will have a higher need for this type of liability insurance than one selling baby clothing.

Professional Liability Insurance

If you do not sell a product, you may provide a service. This also puts you at risk. In this case, though, the defect is not in the product, but in the service. Business owners selling a service need professional liability insurance. It is sometimes called errors and omissions insurance as well. It can protect against risks such as:

• Errors you make when making a statement or selling the service
• Malpractice, commonly associated with doctors and medical professionals, but can also be associated with lawyers and numerous other professions
• Negligence claims

Some types of businesses must have professional liability insurance in order to have an active license. For example, most states require doctors to maintain a malpractice policy.

Business liability insurance may seem complex, but it does not have to be. By having it, though, you reduce the risk of financial loss or even having to shut your doors when someone files a claim against the business. If you give ABM Insurance a call today at 800-362-2809, we would be happy to help you to determine what types of liability risks you have and how adequately to defend against those risks.