Regardless of how well you succeed in your business and how highly your clients regard you, you just can’t be too careful when it comes to protecting your assets from a world that has become highly litigious, filled with too many people all too ready to sue you for any number of reasons.
For that reason, prudent and wise business people protect themselves with liability insurance. Before you open your doors for business, it’s wise to get a liability insurance quote; or better yet, get several and compare them.
WHAT IS LIABILITY INSURANCE
To quote Wikipedia: “Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the “insured”) from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy”.
The insured can expect two important services from its insurer for the premiums it pays. First, the insurer incurs the responsibility to defend its insured against claims brought against it. Many times, a claimant’s attorneys will seek to negotiate a monetary settlement directly with the insurance company. If this is not possible, a civil lawsuit may be filed in the courts and judges and or juries will render a binding decision.
Secondly, the insured is indemnified against monetary damages a claimant may rightly claim. In other words, any money due a claimant will be paid by the insurance company, not the insured.
Of course, the insurance company scrupulously examines any and all claims its insured may bring to be sure the claim is within the bounds of the insurance policy. As you would expect, the insurer will seek to limit its coverage to any extent it can since its whole existence is based on paying out as few claims as possible.
SOME KINDS OF LIABILITY INSURANCE
What sorts of people or businesses avail themselves of liability insurance? One very large group is automobile drivers. In fact, many countries legally mandate that their drivers carry liability insurance.
Why do they do this? The thinking goes like this: Since a car can easily damage property (other cars and personal property) and injure or kill people, it’s necessary to protect potential victims and the best way to do this is through liability insurance.
Another large class of potential buyers that will seek out a liability insurance quote is manufacturers. Think back and you can probably recall large class action suits brought against manufacturers of cars, toys, and many other devices which put their users at risk, or caused them suffering or sometimes even death.
A large fast food chain some years back paid out a hefty sum to one of its customers who was burned by a cup of coffee. The courts ruled that the cup was not suitably safe to protect the customer. Almost surely this claim would have been paid out by the fast food chain’s liability insurer.
COST OF COVERAGE
If you are seeking a liability insurance quote, you will want to fully understand the level of coverage you really need. It’s cost prohibitive to cover all eventualities; however, you will want to be sure you cover your largest exposures. See an expert; get referrals and look for them to advise you of your best approach to covering yourself and your business.
Whatever the cost, it’s money well spent.