Types of business liability insurance policies
Liability insurance in your business insurance plan covers accidents that happen to “third parties” — this means liability claims from people who don’t work for your business.
Several types of liability insurance can help small businesses avoid a financial loss. The coverage you need depends on the risks associated with your operations. Here are some examples of common types of coverage:
General liability
General liability insurance is often the first type of business insurance small business owners purchase because of its wide breadth of coverage. It can provide financial help for common accidents, such as:
Injuries
General liability can help cover medical bills if someone other than an employee gets injured at your business. This is known in legal terms as a “bodily injury.”
Medical payments can add up quickly. Without business insurance, these types of accidents can have a significant impact on your bottom line. With the right coverage, you won’t have to pay entirely out of pocket.
Property damage
General liability can also help if your business is responsible for damaging property that doesn’t belong to you.
Note: If you would like to also have coverage for your business property, you can purchase a business owner’s policy with general liability and commercial property coverage.
Advertising harm
You can get help with defense costs, legal fees and judgments if you are accused of libel, slander or invasion of privacy with your advertising. This is sometimes referred to as a “personal injury” or “advertising injury.”
Professional liability
Professional liability, also known as errors and omissions insurance, can help protect you when you’re accused of negligence or making a professional mistake.
This is a common type of insurance for people who work in professional services.
Pro tip: Learn more about the difference between general liability vs. professional liability insurance.
Commercial auto
Liability coverage with commercial auto insurance can provide financial protections if you are responsible for injuries or property damage after an accident.
Your personal auto insurance may not cover you if you’re driving for business purposes. Commercial auto insurance can provide coverage if you drive for work and it often has higher coverage limits than personal auto policies.
Product liability
Sometimes the products people purchase end up causing them harm.
If you are a retailer — this includes amazon sellers, e-commerce and physical stores — you could be held liable if a product causes an injury or illness.
Product liability insurance can provide financial help if you make, distribute or sell a product that someone claims is defective or dangerous. Even if an accusation is unwarranted, it can help cover legal costs to defend your business.
Employment practices liability insurance
Even with proper training and safeguards in place, accusations of discrimination, sexual harassment and wrongful termination can happen at small businesses with employees.
As the business owner, you could be accused of not taking steps to prevent a hostile work environment.
Employment practices liability insurance (also known as EPLI) can provide coverage for lawsuits involving discrimination, harassment and wrongful termination.
Liquor liability
If you serve alcohol at your business, you could be held responsible for damages if you serve someone who then causes an injury or property damage. Liquor liability insurance can provide financial protection if that happens.
Employer liability
Employer liability is an important part of workers’ compensation insurance which, depending on how many employees you have, is required by law in most states.
Workers’ comp can help pay for employee medical costs and lost wages after work-related injuries.
If your employee sues you for additional damages, employer liability coverage in your workers’ comp policy can help you defend your business.
NEXT offers tailored liability insurance for small businesses
Every business has its own unique risks and hazards. That’s why NEXT offers small business insurance tailored for over 1,300+ business types.
Whether you need liability insurance, workers’ compensation, commercial property insurance, commercial auto or other business insurance, you can create a plan for your business with our fast, tailored and affordable options online.
Plus, save up to 10% when you bundle two or more policies with NEXT.
You can start a quote, customize your options and access your certificate of insurance online in about 10 minutes.
Start your instant quote today.
