Liability Insurance: It Helps More than Just Your Customers

Businesses buy insurance, in essence, to protect themselves. However, one element of coverage is a bit more complicated. Liability insurance is, in many cases, money the business will never get its own hands on. Instead, that goes to other people. So, why do you need this coverage?

Liability insurance might not provide funds directly to your business. However, it’s ample financial protection all the same. Never go without this critical coverage. It might save you in case of damaging allegations against the operation.

General Liability Insurance’s Coverage

If you file a liability claim, the funds from the policy might never actually come to the business. Coverage generally provides funds to others harmed by their interactions with your business. It usually covers:

• Bodily injuries: An example of this is if someone falls in your store and breaks a leg. They can use your coverage to pay medical bills, rehab costs or supplement income.
• Property damage: If you damage someone's belongings, coverage can pay for their losses. For example, if you repair someone’s kitchen table, and then a fire damages the item, coverage can repay them.

Generally, the business owner will file a claim on the policy. In other cases, the injured customer will make the claim themselves. The customer or beneficiary will almost always receive the funds directly. The business might not have a direct financial payout in these cases. That's why many business owners might get confused about why they never receive a payout.

One exception exists if a client brings a lawsuit or other action against the business. Some liability policies cover the legal costs of the business (besides covering settlements). In that regard, you can benefit from this coverage directly.

Still, the indirect protection of coverage often proves most critical to any business. Though you may not receive a check from your insurance company, you will see a financial benefit. By carrying liability coverage, you won’t have to pay for a client’s losses out of pocket.

Consider this. If the client with a broken leg sues you to cover their medical bills, that’s a lot of money. Healthcare can costs thousands of dollars. That doesn’t account for legal fees, settlements and lost time at work that might accompany the claim. Having to pay for these losses out of pocket could devastate the business. It might even make the operation fold.

Don’t let that happen to you. In most cases, you have to carry general liability coverage for your business. So, don’t hesitate to enroll in the highest degree of coverage. Ask your agent to help you tailor coverage to your industry risks.

Also Read: General Liability Insurance for Contractors: You're Busy, Up Your Coverage