If you are a business owner, chances are you’ve been asked time and time again for proof of professional liability insurance. If you are just starting a business, you may be confused about all of the insurances that you are required to have. Businesses must have sufficient insurance in place, and the requirements vary greatly with each type of business. For example, a construction company would be required to have more insurance with higher coverage than a book shop; that’s pretty obvious.
Insurance business liability is just one of the types of insurance that you can put in place to protect you and the business you have worked so hard to build. Here is a closer look at two major insurances.
What is Professional Liability Insurance?
Professional liability insurance is also commonly known as errors and omissions (E&O) insurance. It’s a type of insurance liability that protects business owners, especially those providing professional advice or services, against negligence claims. When faced with a lawsuit by a client claiming that there was an error or omission in the advice given or service provided, the majority of your expenses can be covered by having company liability insurance in place.
Many policies will even cover the cost of defense and other legal fees, and will cover anything awarded to the client, should they win. Whether you made an honest mistake or the judge simply believed that, “the customer is always right,” your professional liability insurance will cover you. This kind of liability insurance for small businesses is perhaps even more important than for large scale companies. As a small business, one big lawsuit could be enough to shut down your company. With professional liability insurance in place, you are protected no matter what.
What is General Liability Insurance?
General liability insurance is usually a requirement for businesses to have in place at all times. The cost of liability insurance varies from business to business, but this is usually the easiest type of policy to have in place. There are several types of liability insurance, each covering a different aspect of your business. There are policies available for your employees, you as the employer, your product, and the public that you work with.
A general liability policy covers all of these things under one giant policy. It keeps things simple and ensures that nothing is left out. The major coverage includes public and product liability, which means that the products you provide are insured in case anything should ever happen to them. This also covers equipment used by service companies. Should the equipment be lost or stolen, your general liability policy will cover the cost of replacement.
Public liability covers the clients and customers that you work with. This is especially important for those in the service industry as it protects against any damage accidentally caused in a customer’s home. Many times, customers will ask to see proof of this coverage before allowing you to work for them. Having a general liability policy in place not only protects you and your business, it lets your customers know that you are looking out for their well-being as well.