A civil wrong that results in harm or loss.


What is a tort?

A tort is a wrongful act or an action that harms someone else. It’s usually a civil (non-criminal) offense. A person who commits a tort is called a tortfeasor.

In the context of small business insurance, a tort is a wrongful act that leads to damage or loss, for which the wrongdoer becomes legally responsible. This can include issues like negligence, battery, defamation or product-related harm.

Tort vs. contractual claim: What’s the difference?

Accidents that happen at your business can lead to both tort and contractual claims. However, the legal grounds for each are different, as are the types of losses that can be recovered.

Tort claims come from legal responsibilities and social norms. They involve harm that was caused by carelessness or was purposeful.

Contractual claims, on the other hand, happen when someone breaks a deal or agreement.

With health and property insurance, risks already known are covered, no matter who is at fault. For tort cases, however, liability is determined, and you (the insured) pay for any damages you cause.

Common types of tort claims

A tort claim is a lawsuit someone files to get money for damage they got in an accident. Common tort claims involve:

  • Negligence: Business failure in reasonable care causing harm, like a wet floor without warning leading to a customer slip.
  • Product liability: Covers injuries from defective products, vital for manufacturing, distribution or sales businesses.
  • Personal and advertising injury: Includes libel, slander, defamation, wrongful eviction, privacy violations and certain copyright claims.
  • Professional mistakes: When you or your employees are accused of making a mistake that causes financial harm to another person or business.
  • Premises liability: Injury or property damage caused by dangerous conditions or negligence at a business property.

Insurance provides a safety net by transferring risk to an insurance carrier. It ensures that victims are compensated for the harm they have suffered.

If you’ve linked your personal and business assets and don’t have insurance to cover a tort, you risk your personal finances and reputation.

How to minimize exposure to tort claims

You can take steps to minimize your exposure to tort claims. Some actions include:

  • Do a risk assessment.
  • Establish workplace safety protocols and measures.
  • Ensure the business follows local, state and federal laws.
  • Consult legal and insurance experts.
  • Select business insurance that covers your business’ most significant risks.
  • Review and update insurance policies as your business grows to ensure you’re always covered.
  • Establish processes for unexpected events. This might include incident documentation, customer complaint mechanisms and a routine for contacting your insurer in case of a tort claim.
  • Implement compliance, safety and risk management training for employees.
  • Use contracts to transfer risk where appropriate, including indemnity clauses in agreements with suppliers or contractors.

Let NEXT take care of your business

We know your business is unique and has specific needs. That’s why we offer affordable, custom business insurance.

To get your tailored instant quote, simply answer a few questions online. Once you’ve purchased your insurance, you can immediately access your certificate of insurance and share it 24/7 via the NEXT app.

Start a free instant quote with NEXT.

banner get business insurance in 10

There’s a lot to love about NEXT

Business insurance in less than 10 minutes

Get insurance in less than 10 minutes and you can save up to 25% in discounts*

Tailored business insurance

Unique, flexible coverage with easy monthly payments

Get business insurance online

Do it all 100% online or talk to a licensed U.S.-based advisor

Let’s find the coverage you need for your business
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
What we cover
Chat with Us

Mon – Fri | 8 a.m. – 5 p.m. CT

© 2024 Next Insurance, Inc. 975 California Ave, Palo Alto, CA 94304, United States
Better Business Bureau
Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.