{"id":725,"date":"2020-12-07T11:57:03","date_gmt":"2020-12-07T06:27:03","guid":{"rendered":"https:\/\/www.plancover.com\/insurance\/?p=725"},"modified":"2021-07-28T15:17:49","modified_gmt":"2021-07-28T09:47:49","slug":"what-is-liability-insurance-and-types-of-liability-insurance","status":"publish","type":"post","link":"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/","title":{"rendered":"What Is Liability Insurance And Types Of Liability Insurance"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2d36781acff\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2d36781acff\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/#Table_of_Content\" title=\"Table of Content\">Table of Content<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/#What_is_Liability_Insurance\" title=\"What is Liability Insurance?\">What is Liability Insurance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/#Why_Liability_Insurance\" title=\"Why Liability Insurance?\">Why Liability Insurance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/#What_are_the_types_of_Liability_Insurance\" title=\"What are the types of Liability Insurance?\">What are the types of Liability Insurance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/#Liability_Risk_Framework_for_Small_Businesses\" title=\"Liability Risk Framework for Small Businesses\">Liability Risk Framework for Small Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.plancover.com\/insurance\/what-is-liability-insurance-and-types-of-liability-insurance\/#How_to_Buy_Liability_Insurance_Policies\" title=\"How to Buy Liability Insurance Policies?\">How to Buy Liability Insurance Policies?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Table_of_Content\"><\/span>Table of Content<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"padding-left: 40px;\"><span style=\"font-size: 14pt;\">What is Liability Insurance?<br \/>\n<span style=\"font-size: 14pt;\">Why Liability Insurance?<br \/>\n<span style=\"font-size: 14pt;\">What are the types of Liability Insurance?<br \/>\n<span style=\"font-size: 14pt;\">Liability Risk Framework for Small Businesses<br \/>\n<span style=\"font-size: 14pt;\">How to Buy Liability Insurance Policies?<\/span><\/span><\/span><\/span><\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Liability_Insurance\"><\/span>What is Liability Insurance?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-size: 14pt;\">You operate or manage a business, you may be liable for damages or injuries to another person or property.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Liability insurance protects a business against third party insurance claims. These claims can be as a result of either :<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">bodily injury, or property damage liabilities<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Personal and advertising injury liabilities<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Error or omissions and professional mistakes<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Professional negligence liabilities<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Product failure resulting into financial losses<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt;\">Businesses today are also providing professional services and expertise to their clients. There is an inherent risk of your business being sued by the client for injury due to your negligence, error or omission.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Liability insurance will help you financially to pay for these damages as well.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Unlike other traditional insurances, payment of a claim in liability insurance is not paid to the insured, but to a third-party suffering loss. This party is not a party to the insurance contract between the insured and the insurance company.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Though liability insurance is optional in most cases, it is strongly recommended for businesses across industries to purchase as the likelihood of being sued is unpredictable and very expensive.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_Liability_Insurance\"><\/span>Why Liability Insurance?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><span style=\"font-size: 14pt;\">People &amp; Organisations can make mistakes that injures someone or damages property resulting into a legal liability.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Lawsuits are expensive and could potentially bankrupt your business.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Liability insurance protects your assets and pays for the financial loss.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_are_the_types_of_Liability_Insurance\"><\/span>What are the types of Liability Insurance?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-size: 14pt;\">There are several types of liability insurance that businesses should consider as part of their overall risk mitigation through insurance:<\/span><\/p>\n<p><span style=\"color: #000000;\"><strong><span style=\"font-size: 18pt;\">1. <a href=\"https:\/\/www.plancover.com\/business\/commercial-general-liability-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">Commercial General Liability Insurance<\/a><\/span><\/strong><\/span><\/p>\n<p><span style=\"font-size: 14pt;\">A Commercial General Liability insurance policy is one of the most important policies to be considered for all businesses. There are potential threats of an accident to a customer, vendor, or any third-party involved with your business. Even a simple slip and fall in the premises can be devastating resulting in a potential lawsuit. The Commercial General Liability Insurance policy will provide necessary financial support to businesses against any legal liabilities due to a bodily injury or property damage that can occur as a result of your business operations.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Commercial General Liability insurance is a combination policy covering both public and product liabilities under one single policy form.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">Covers for legal liability to pay damages because of bodily injury or property damages with no limitations for cover in terms of premises- owned\/rented or at premises\/out-of premises.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Coverage includes all bodily injury and property damage arising out of products of the businesses.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Product Liability Insurance will cover for cost of compensation against financial losses suffered by a third-party arising out of use or consumption of a faulty product.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt;\">The third-party has to suffer a bodily injury or property damage. Any damages because of personal and advertising injury caused by an offence arising out of business.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">This insurance provides cover for payments, medical expenses and damages including:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">Legal liability expenses including claimant\u2019s costs, fees and Defense costs.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Damage costs \u2013 monetary sums pursuant to judgments or awards and settlements.<\/span><\/li>\n<\/ul>\n<p><strong><span style=\"font-size: 18pt;\">2. <a href=\"https:\/\/www.plancover.com\/business\/directors-officers-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">Directors and Officers Liability Insurance<\/a><\/span><\/strong><\/p>\n<p><span style=\"font-size: 14pt;\">Directors and Officers (D&amp;O) Insurance provides for financial protection for a manager, in the event of a claim against them, alleging a wrongful act in a managerial or supervisory role in the organisation.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">\u201cWRONGFUL\u201d &#8211; &#8211; &#8211; In the Directors and Officers Insurance context, \u201cWRONGFUL\u201d means; any actual or alleged misrepresentation, misstatement, misleading statement, error, omission, defamation, negligence, breach of warranty of authority or breach of duty means.<\/span><\/p>\n<p><strong><span style=\"font-size: 14pt;\">Risks covered under D&amp;O insurance:<\/span><\/strong><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">Regulatory investigations.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Accounting irregularities<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Exposures relating to mergers and acquisitions<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Vulnerability to shareholder\/stakeholder claims:<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Employment practice violations including harassment, discrimination allegations, wrongful termination.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Securities claims, those related to shareholder value<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt;\">The D&amp;O insurance pays for Defense costs, Public Relations expenses, Extradition costs Emergency costs advancement.<\/span><\/p>\n<p><strong><span style=\"font-size: 18pt;\">3. <a href=\"https:\/\/www.plancover.com\/business\/professional-indemnity\" target=\"_blank\" rel=\"noopener noreferrer\">Professional Indemnity Insurance<\/a><br \/>\n<\/span><\/strong><\/p>\n<p><span style=\"font-size: 14pt;\">Errors &amp; Omissions insurance protects professionals and businesses providing professional services to their clients against any legal liability. This insurance covers for costs towards damages resulting due to any negligence, breach of professional duty due to an act, errors or omission committed or occurring in good faith and resulting in monetary loss or damage to clients.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Errors &amp; Omissions insurance is also called as \u201cProfessional Indemnity insurance\u201d.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Medical professionals including doctors, surgeons, and physicians are covered under a separate professional indemnity policy, popularly known as \u201cMedical Malpractice insurance\u201d or \u201cDoctors Indemnity insurance\u201d.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Errors &amp; Omissions insurance policy covers the professionals, employees, partners, and the professional\u2019s company or partnership for damages directly caused by providing or failing to provide professional services.\u00a0 \u201cDamages\u201d mean a monetary loss suffered by the client of the professional\/ business as a direct result of their services.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">This insurance will pay for settlements &amp; judgment charges, attorney\/court fees, and legal representation costs incurred towards investigation and defence of the claim.<\/span><\/p>\n<p><strong><span style=\"font-size: 18pt;\">4. <a href=\"https:\/\/www.plancover.com\/business\/workmen-compensation-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">Workmen Compensation Insurance<\/a><\/span><\/strong><\/p>\n<p><span style=\"font-size: 14pt;\">Every employer is responsible to provide a safe and hygienic working environment for their employees. Accidents to employees during their course of employment can result in financial damages to both the employee and the employer.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">The Workmen Compensation policy provides for required protection to employees\u2019 against all accidents resulting during their course of employment. This insurance policy helps to pay for work-related injuries and occupational illnesses without the intervention of a lawsuit. \u00a0<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">An employer is liable under law towards the employees in respect of any injury or occupational disease arising out of and in the course of employment. The employers\u2019 legal liability may arise under the following conditions:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">Negligence in failure to use reasonable care and skill in the provision and maintenance of suitable, safe plant and safe place to work.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Personal injury caused to workmen by accident arising out of and in the course of his employment.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">If the workman contracts any disease, specified in the Act (Workmen Compensation Act, 1923) as an occupational disease, the illness is deemed to be injury by accident arising out of and in the course of the employment.<\/span><\/li>\n<\/ul>\n<p><strong><span style=\"font-size: 18pt;\">5. <a href=\"https:\/\/www.plancover.com\/business\/cyber-risk-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">Cyber risk Insurance<\/a><\/span><\/strong><\/p>\n<p><span style=\"font-size: 14pt;\">With an increasing amount of transactions done over the internet, SMEs are susceptible to data security and cyber attacks resulting in both financial and reputation loss.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Cyber risk insurance will help SMEs mitigate this risk, focus on their business and stay afloat. A cyber risk insurance program helps an organisation mitigate the risk of data breach exposure by offsetting costs involved with management and recovery after a cyber-related security breach. It Covers direct loss, legal liability, and consequential loss resulting from cyber security breaches.<\/span><\/p>\n<p><strong><span style=\"font-size: 14pt;\">Cyber risk insurance covers for the following:<\/span><\/strong><\/p>\n<p><span style=\"font-size: 14pt;\">First Party risk \u2013 covers own business assets.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">Data breach\/privacy covers for expenses related to the management of the incident, legal costs.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Business interruption \u2013 monetary losses due to network downtime.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Extortion and ransom payments.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Crises management and public relations.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt;\">Third party risks \u2013 Covers for any damage to third-party.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">Multimedia\/Media liability cover. Includes specific defacement of website and intellectual property rights infringement.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Network security liability. Third-party.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">damages as a result of denial of access.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Any liability of third-party loss due to negligence of an organisation.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Liability_Risk_Framework_for_Small_Businesses\"><\/span>Liability Risk Framework for Small Businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<table style=\"width: 98.2981%; height: 1807px;\" width=\"737\">\n<tbody>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><strong><span style=\"font-size: 14pt;\">Liability insurance policy<\/span><\/strong><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><strong><span style=\"font-size: 14pt;\">Liability arising from<\/span><\/strong><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><strong><span style=\"font-size: 14pt;\">Liability due to<\/span><\/strong><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><strong><span style=\"font-size: 14pt;\">Coverage<\/span><\/strong><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><strong><span style=\"font-size: 14pt;\">Who can buy<\/span><\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><span style=\"font-size: 14pt;\">Directors and Officers Liability Insurance<\/span><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><span style=\"font-size: 14pt;\">External stakeholder (shareholders, creditors, suppliers, customers, competitors or regulators) or by an internal stakeholder (board of directors, employees).<\/span><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><span style=\"font-size: 14pt;\">Regulatory investigations, Accounting irregularities, Employment practice violations: Sexual harassment, discrimination, wrongful termination and failure to promote. Unfair business practices.<\/span><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><span style=\"font-size: 14pt;\">Defense costs \u2013 Legal expenses and costs, Extradition costs \u2013 Costs to have a legal adviser or tax consultant towards advice on extradition proceedings, and settlement costs.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">.<\/span><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><span style=\"font-size: 14pt;\">All businesses irrespective of non-profit or profit making.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><span style=\"font-size: 14pt;\">Commercial General Liability Insurance<\/span><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><span style=\"font-size: 14pt;\">Non-employees, Customers, vendors, suppliers<\/span><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><span style=\"font-size: 14pt;\">Physical injuries, property damage, manufacturing defects for products<\/span><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><span style=\"font-size: 14pt;\">Legal fees, judgement and settlement costs.<\/span><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><span style=\"font-size: 14pt;\">SMEs in all industries<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><span style=\"font-size: 14pt;\">Employees Compensation Insurance<\/span><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><span style=\"font-size: 14pt;\">Employees<\/span><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><span style=\"font-size: 14pt;\">Bodily injury, and illness (occupational hazard related only) during the course of employment.<\/span><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><span style=\"font-size: 14pt;\">Death, disability (Permanent total and partial disability), loss of wages, medical expenses.<\/span><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><span style=\"font-size: 14pt;\">SMEs in all industries with employee count less than 20.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><span style=\"font-size: 14pt;\">Professional Indemnity Insurance (Errors and Omissions Insurance)<\/span><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><span style=\"font-size: 14pt;\">Customers<\/span><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><span style=\"font-size: 14pt;\">Financial loss due to mistakes and negligence.<\/span><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><span style=\"font-size: 14pt;\">Legal fees, judgement and settlement costs.<\/span><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><span style=\"font-size: 14pt;\">IT\/ITES industry, accountants, architects, professional services companies.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><span style=\"font-size: 14pt;\">Doctors Professional Indemnity Insurance<\/span><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><span style=\"font-size: 14pt;\">Patients<\/span><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><span style=\"font-size: 14pt;\">Medical negligence<\/span><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><span style=\"font-size: 14pt;\">Legal fees, judgement and settlement costs.<\/span><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><span style=\"font-size: 14pt;\">Doctors, physicians, surgeons, healthcare companies.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 16.0099%;\" width=\"117\"><span style=\"font-size: 14pt;\">Cyber Liability Insurance<\/span><\/td>\n<td style=\"width: 17.2414%;\" width=\"129\"><span style=\"font-size: 14pt;\">Customers<\/span><\/td>\n<td style=\"width: 20.197%;\" width=\"152\"><span style=\"font-size: 14pt;\">Data compromise and breach, business interruption<\/span><\/td>\n<td style=\"width: 26.9704%;\" width=\"205\"><span style=\"font-size: 14pt;\">Customer notification, data recovery expenses, Legal fees and<\/span><\/td>\n<td style=\"width: 17.9803%;\" width=\"135\"><span style=\"font-size: 14pt;\">Retailers, healthcare organisations, financial service providers and other businesses managing customer payment related information, details,<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"How_to_Buy_Liability_Insurance_Policies\"><\/span>How to Buy Liability Insurance Policies?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-size: 14pt;\">Just knowing about different <strong>types of liability insurance<\/strong> isn&#8217;t sufficient. When you&#8217;re looking to <strong>buy liability insurance<\/strong>, there&#8217;s a lot you should know and there are several factors you should consider to make an informed decision. <\/span><\/p>\n<p><span style=\"font-size: 14pt;\"><br \/>\nThe first step is to identify the <strong>types of liability insurance policies<\/strong> your business requires. There are many types; you should pick those that are relevant to your business.<\/span><br \/>\n<span style=\"font-size: 14pt;\"><br \/>\nSecond, you need to determine the coverage requirement. The <strong>types of liability insurance<\/strong> you&#8217;re planning to buy, what should be the sum insured; what individual policies should cover and exclude. This depends on your risk exposures, which vary from one business to another. For instance, a restaurant owner would have different risk exposures in comparison to, say, a consultancy agency. You need to identify the risk exposures, and thereon the coverage requirement for all the <strong>types of liability insurance policies<\/strong> you want to buy.<\/span><br \/>\n<span style=\"font-size: 14pt;\"><br \/>\nFollowing, you will have to find an insurance company that offers <strong>good liability insurance plans<\/strong>. This stage of the process can be a challenge, requiring extensive research work. In any case, once you have found a good insurance company that offers good plans for the different types of <strong>liability insurance<\/strong> you&#8217;re looking for, buy those plans. At times, you may require to customize the standard plans to better fit your needs.<\/span><br \/>\n<span style=\"font-size: 14pt;\"><br \/>\nIn general, it&#8217;s recommended you get help from experts. They can assist you throughout the process, right from helping you find the right <strong>types of liability insurance<\/strong> for your business to taking care of all the paperwork for you. <\/span><br \/>\n<span style=\"font-size: 14pt;\"><br \/>\nAt PlanCover, as one of the <a href=\"https:\/\/www.plancover.com\/\"><strong>leading insurance brokers<\/strong><\/a>, we have helped thousands of businesses to buy the best liability insurance policies. We have an experienced team of licensed insurance brokers who can help you buy the right policies. Get in touch with us today and let&#8217;s talk.<\/span><\/p>\n<p style=\"text-align: center;\"><iframe loading=\"lazy\" style=\"border: 0;\" src=\"https:\/\/www.google.com\/maps\/embed?pb=!1m18!1m12!1m3!1d3504.681535671373!2d77.21253971508075!3d28.549290482450626!2m3!1f0!2f0!3f0!3m2!1i1024!2i768!4f13.1!3m3!1m2!1s0x0%3A0x8d4ed9481e374523!2sPlanCover%20%3A%20Group%20Health%20Insurance%20%7C%20Professional%20Indemnity%20%7C%20CGL%20Policy!5e0!3m2!1sen!2sin!4v1627458194250!5m2!1sen!2sin\" width=\"600\" height=\"450\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [{\n    \"@type\": \"Question\",\n    \"name\": \"What is Liability Insurance?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"You operate or manage a business, you may be liable for damages or injuries to another person or property.<\/p>\n<p>Liability insurance protects a business against third party insurance claims. These claims can be as a result of either :<\/p>\n<p>bodily injury, or property damage liabilities\nPersonal and advertising injury liabilities\nError or omissions and professional mistakes\nProfessional negligence liabilities\nProduct failure resulting into financial losses\nBusinesses today are also providing professional services and expertise to their clients. There is an inherent risk of your business being sued by the client for injury due to your negligence, error or omission.<\/p>\n<p>Liability insurance will help you financially to pay for these damages as well.<\/p>\n<p>Unlike other traditional insurances, payment of a claim in liability insurance is not paid to the insured, but to a third-party suffering loss. This party is not a party to the insurance contract between the insured and the insurance company.<\/p>\n<p>Though liability insurance is optional in most cases, it is strongly recommended for businesses across industries to purchase as the likelihood of being sued is unpredictable and very expensive.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"Why Liability Insurance?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"People & Organisations can make mistakes that injures someone or damages property resulting into a legal liability.\nLawsuits are expensive and could potentially bankrupt your business.\nLiability insurance protects your assets and pays for the financial loss.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"What are the types of Liability Insurance?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"There are several types of liability insurance that businesses should consider as part of their overall risk mitigation through insurance:<\/p>\n<p>1. Commercial General Liability Insurance<\/p>\n<p>A Commercial General Liability insurance policy is one of the most important policies to be considered for all businesses. There are potential threats of an accident to a customer, vendor, or any third-party involved with your business. Even a simple slip and fall in the premises can be devastating resulting in a potential lawsuit. The Commercial General Liability Insurance policy will provide necessary financial support to businesses against any legal liabilities due to a bodily injury or property damage that can occur as a result of your business operations.<\/p>\n<p>Commercial General Liability insurance is a combination policy covering both public and product liabilities under one single policy form.<\/p>\n<p>Covers for legal liability to pay damages because of bodily injury or property damages with no limitations for cover in terms of premises- owned\/rented or at premises\/out-of premises.\nCoverage includes all bodily injury and property damage arising out of products of the businesses.\nProduct Liability Insurance will cover for cost of compensation against financial losses suffered by a third-party arising out of use or consumption of a faulty product.\nThe third-party has to suffer a bodily injury or property damage. Any damages because of personal and advertising injury caused by an offence arising out of business.<\/p>\n<p>This insurance provides cover for payments, medical expenses and damages including:<\/p>\n<p>Legal liability expenses including claimant\u2019s costs, fees and Defense costs.\nDamage costs \u2013 monetary sums pursuant to judgments or awards and settlements.\n2. Directors and Officers Liability Insurance<\/p>\n<p>Directors and Officers (D&O) Insurance provides for financial protection for a manager, in the event of a claim against them, alleging a wrongful act in a managerial or supervisory role in the organisation.<\/p>\n<p>\u201cWRONGFUL\u201d \u2013 \u2013 \u2013 In the Directors and Officers Insurance context, \u201cWRONGFUL\u201d means; any actual or alleged misrepresentation, misstatement, misleading statement, error, omission, defamation, negligence, breach of warranty of authority or breach of duty means.<\/p>\n<p>Risks covered under D&O insurance:<\/p>\n<p>Regulatory investigations.\nAccounting irregularities\nExposures relating to mergers and acquisitions\nVulnerability to shareholder\/stakeholder claims:\nEmployment practice violations including harassment, discrimination allegations, wrongful termination.\nSecurities claims, those related to shareholder value\nThe D&O insurance pays for Defense costs, Public Relations expenses, Extradition costs Emergency costs advancement.<\/p>\n<p>3. Professional Indemnity Insurance<\/p>\n<p>Errors & Omissions insurance protects professionals and businesses providing professional services to their clients against any legal liability. This insurance covers for costs towards damages resulting due to any negligence, breach of professional duty due to an act, errors or omission committed or occurring in good faith and resulting in monetary loss or damage to clients.<\/p>\n<p>Errors & Omissions insurance is also called as \u201cProfessional Indemnity insurance\u201d.<\/p>\n<p>Medical professionals including doctors, surgeons, and physicians are covered under a separate professional indemnity policy, popularly known as \u201cMedical Malpractice insurance\u201d or \u201cDoctors Indemnity insurance\u201d.<\/p>\n<p>Errors & Omissions insurance policy covers the professionals, employees, partners, and the professional\u2019s company or partnership for damages directly caused by providing or failing to provide professional services.  \u201cDamages\u201d mean a monetary loss suffered by the client of the professional\/ business as a direct result of their services.<\/p>\n<p>This insurance will pay for settlements & judgment charges, attorney\/court fees, and legal representation costs incurred towards investigation and defence of the claim.<\/p>\n<p>4. Workmen Compensation Insurance<\/p>\n<p>Every employer is responsible to provide a safe and hygienic working environment for their employees. Accidents to employees during their course of employment can result in financial damages to both the employee and the employer.<\/p>\n<p>The Workmen Compensation policy provides for required protection to employees\u2019 against all accidents resulting during their course of employment. This insurance policy helps to pay for work-related injuries and occupational illnesses without the intervention of a lawsuit.  <\/p>\n<p>An employer is liable under law towards the employees in respect of any injury or occupational disease arising out of and in the course of employment. The employers\u2019 legal liability may arise under the following conditions:<\/p>\n<p>Negligence in failure to use reasonable care and skill in the provision and maintenance of suitable, safe plant and safe place to work.\nPersonal injury caused to workmen by accident arising out of and in the course of his employment.\nIf the workman contracts any disease, specified in the Act (Workmen Compensation Act, 1923) as an occupational disease, the illness is deemed to be injury by accident arising out of and in the course of the employment.\n5. Cyber risk Insurance<\/p>\n<p>With an increasing amount of transactions done over the internet, SMEs are susceptible to data security and cyber attacks resulting in both financial and reputation loss.<\/p>\n<p>Cyber risk insurance will help SMEs mitigate this risk, focus on their business and stay afloat. A cyber risk insurance program helps an organisation mitigate the risk of data breach exposure by offsetting costs involved with management and recovery after a cyber-related security breach. It Covers direct loss, legal liability, and consequential loss resulting from cyber security breaches.<\/p>\n<p>Cyber risk insurance covers for the following:<\/p>\n<p>First Party risk \u2013 covers own business assets.<\/p>\n<p>Data breach\/privacy covers for expenses related to the management of the incident, legal costs.\nBusiness interruption \u2013 monetary losses due to network downtime.\nExtortion and ransom payments.\nCrises management and public relations.\nThird party risks \u2013 Covers for any damage to third-party.<\/p>\n<p>Multimedia\/Media liability cover. Includes specific defacement of website and intellectual property rights infringement.\nNetwork security liability. Third-party.\ndamages as a result of denial of access.\nAny liability of third-party loss due to negligence of an organisation.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"How to Buy Liability Insurance Policies?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Just knowing about different types of liability insurance isn\u2019t sufficient. When you\u2019re looking to buy liability insurance, there\u2019s a lot you should know and there are several factors you should consider to make an informed decision.<\/p>\n<p>The first step is to identify the types of liability insurance policies your business requires. There are many types; you should pick those that are relevant to your business.<\/p>\n<p>Second, you need to determine the coverage requirement. The types of liability insurance you\u2019re planning to buy, what should be the sum insured; what individual policies should cover and exclude. This depends on your risk exposures, which vary from one business to another. For instance, a restaurant owner would have different risk exposures in comparison to, say, a consultancy agency. You need to identify the risk exposures, and thereon the coverage requirement for all the types of liability insurance policies you want to buy.<\/p>\n<p>Following, you will have to find an insurance company that offers good liability insurance plans. This stage of the process can be a challenge, requiring extensive research work. In any case, once you have found a good insurance company that offers good plans for the different types of liability insurance you\u2019re looking for, buy those plans. At times, you may require to customize the standard plans to better fit your needs.<\/p>\n<p>In general, it\u2019s recommended you get help from experts. They can assist you throughout the process, right from helping you find the right types of liability insurance for your business to taking care of all the paperwork for you.<\/p>\n<p>At PlanCover, as one of the leading insurance brokers, we have helped thousands of businesses to buy the best liability insurance policies. We have an experienced team of licensed insurance brokers who can help you buy the right policies. Get in touch with us today and let\u2019s talk.\"\n    }\n  }]\n}\n<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Table of Content What is Liability Insurance? Why Liability Insurance? What are the types of Liability Insurance? Liability Risk Framework for Small Businesses How to Buy Liability Insurance Policies? 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