Main Types of Liability Insurance
What is Liability Insurance?
Liability insurance protects companies from the costs of compensation claims due to damage suffered by employees, clients, customers, citizens, etc.
Liability insurance usually covers the cost of indemnifying a third party for:
- personal injuries
- loss of or damage to property
- financial losses
Business general liability insurance
It covers the costs of damages caused to third parties in connection with your business activities. Material damages caused to the property of third parties or non-material damages arising from physical damage are generally covered.
Employer liability insurance
It covers the costs of indemnifying employees against damage suffered during work. It can also cover damage to the employee's property.
Defective product liability insurance
It covers the costs of indemnifying persons injured or whose property was damaged by a defective product your company designs, manufactures or supplies.
Professional liability insurance
It covers the costs of indemnifying clients for loss or damage resulting from an omission or error in professional services or advice provided by your company and/or individual employee. Unlike general liability, the most common result of such omission is financial loss.
Directors and officers (D&O) liability insurance
It covers the costs of compensation claims initiated against directors and/or other management members in your company due to errors or omissions in performing work duties. Insured persons can be both the company as well as the directors and management members as natural persons.
Business General Liability Insurance
General liability insurance covers the cost of claims made by members of the public for incidents that occur in connection with your business activities.
General liability insurance covers the cost of compensation for:
- personal injuries
- loss of or damage to property
- death
Terms may vary from insurer to insurer, but most general liability policies cover you for:
- incidents that occur on your business premises
- incidents that take place off-site, at events or activities organised by your company.
Do I need this coverage?
You should consider general liability insurance if:
- you own business premises that members of the public, customers or clients visit
- your business organises off-site events or activities that are attended by members of the public
- to perform business activities, your employees are located on premises where there is property of third parties, especially when your activity is at an increased risk of causing damage to third parties (construction, assembly, maintenance, etc.)
The insurance covers a future uncertain event, and regardless of your activity, you can easily protect yourself even from unfounded claims because liability insurance also provides legal protection and can cover court costs.
The insurance premium depends directly on your activity. If you are engaged in a relatively risk-free activity and believe that you have no immediate need for this insurance, the insurer will probably have a similar opinion, and the premium to protect your company may be symbolic.
Employer Liability Insurance
General liability insurance covers all persons, other than employees, with whom you communicate or come into contact in the course of your business, such as:
- people visiting your company
- customers
- clients
- people participating in events and/or activities organised by you
- people watching events and/or activities organised by you
General liability insurance does not cover employees, temporary employees or people in workplaces – for this, you’ll need employer liability insurance. It is usually contracted as an extension of business general liability insurance. Employees are persons with whom your company is in daily contact. This is the greatest exposure to risk when it comes to physical injuries. Employee accident insurance and insurance payouts based on injury or, in extreme cases, the death of an employee do not prevent a possible lawsuit and court costs that may result from it.
If you are not sure about the risks you are exposed to and what types of liability policy you should contract, the expert team of professionals from the insurance mediator Eurosolutions Ltd. is ready to assist you, relying on its many years of experience in developing a coverage plan that will meet all your specific needs. We are here for you! Consult our specialists and sign the ideal policy for you.