Lawsuits are a constant threat to a company, big or small. Any negligent acts or running bad venture capital can lead to big trouble. This is the reason why most businesses like to protect themselves by getting a commercial general liability insurance. While the insurance will protect against the legal hassles, it won’t offer protection to the directors and officers. There are specialized policies to help get cover form special cases and protection against errors and omissions.
As a business owner, one needs some kind of liability insurance to protect your livelihood. Even a minor accident or issue could result in a lawsuit that would get difficult for you to handle. Carrying sufficient general liability insurance is the best way to get complete protection. Some workers would require that you carry some amount of general liability insurance before they will work for you.
Let us take a look at different liability insurance and whether they meet your coverage needs.
Errors & Omissions
E&O or Errors & Omissions liability insurance offers coverage for negligent professional services. IT companies, Engineers, architects, accountants and lawyers or any other business offering service to a client will need this insurance. The insurance will cover all expenses related to judgment, legal and settlement expenses. The limit of the policy will decide the coverage and some profession have more potential risk exposure than others. The insurance starts from at $1 million typically. The kind of business, its location, experience, etc. will decide the insurance and influence it. Under this policy, the insurer has the right to protect the insured and will control the costs and the defense strategies. These policies work on the basis of claims-made and therefore, the claims need to be made.
Directors & Officers
D&O or Directors & Officers liability insurance offers protection to directors and officers against any legal judgments and the costs involved. There might be incorrect investment decisions made, unlawful acts, hiring and firing decisions, gross negligence, etc. The Company directors and officers who are answerable to shareholders, investors, employees, creditors, etc. The limits of liability for the minimum policy are $1 million. Most D&O policies will not cover criminal acts and frauds. Other usual exclusions are claims due to property damage, bodily injury, punitive damages, etc.
If you need protection for personal property, or commercial buildings, you might need the additional protection. Find out if you are eligible and take advantage of the general liability insurance.