Being a director or official of a company makes you vulnerable to accusations of wrongful acts in the performance of your work.
Liability insurance for
directors and officers protects you from claims brought against you by a range of third parties, from shareholders to customers. It allows you to focus on running the company instead of worrying about protracted litigation. If your company provides a service to other people, you may need professional liability insurance, also known as error insurance & and omissions (E&O).Professional services firms, media organizations, public entities, consulting firms and contracting firms are just a few types of companies that run the constant risk of being in demand for the services they provide and the information they disseminate. A professional liability policy can provide protection, even if the lawsuit is baseless. For more information on professional liability, see What is professional liability insurance? If you have employees, you may need to purchase a work injury compensation policy, which is a type of employer liability insurance. Work injury compensation policies provide coverage if an employee is injured or sick because of their job.
You can pay for medical care and help protect your company from lawsuits for work-related injuries or illnesses. Every company is different and has its own liability risks, so it's always important to review your coverage options with your agent or broker. You can also add other types of business insurance to meet the needs of your business. For example, if you're using a vehicle for work purposes, you can add commercial auto insurance.
A good way to expand your business liability insurance is to purchase a general commercial insurance policy. This gives you an extra layer of protection against costly lawsuits. A general liability insurance policy is the basic coverage for your small business, but it won't cover problems such as theft, vandalism, fire, adverse weather conditions, and lost income. Professional liability insurance, sometimes referred to as errors and omissions or malpractice insurance, is intended for firms that offer professional services, such as lawyers, accountants, architects, engineers, health or beauty professionals.
Generally, general liability only covers any unprofessional negligent act, that is, negligence that is not related to the provision of professional or expert services. A good way to do this is to buy BOP, which combines general liability insurance with commercial property insurance and business interruption insurance. Policies generally cover liability resulting from errors and omissions, negligent acts and misrepresentations. That means that it's not a question of whether or not you need liability insurance, but what types fit the needs of your company.
Liability insurance for directors and officers covers insured persons against any financial consequences that arise from their activities as managers. We live in a litigious society and a single lawsuit can have the potential to cripple your business and drain your savings, which is why liability insurance is an essential part of any business insurance plan. You may need additional types of liability insurance for your small business to cover any gaps in coverage. For example, if someone is injured on your company's premises and you decide to sue them because it is alleged that the incident was due to their negligence, their liability insurance will cover the expenses derived from the legal procedure (defense or investigation expenses).
With the right liability insurance, you will be protected against lawsuits filed by your customers for material, bodily or financial damage. General liability insurance protects a company against customer and customer bodily injury and property damage claims. This is a manual on the different types of commercial liability insurance available and how they can protect you and your business. Whether you buy general liability insurance as a standalone policy or as part of a BOP, you'll want to compare commercial insurance quotes from several insurance companies.
General liability insurance is a basic type of coverage for any small business insurance policy, but it's only part of the solution to the multitude of problems that could affect your business financially. .
