Business Risk Solutions

Unfortunately for every business owner, the chances of getting sued have dramatically increased in the last decade. General Liability insurance can prevent a legal suit from turning into a financial disaster by providing financial protection in case your business is ever sued or held legally responsible for some injury or damage. If you have a personal umbrella liability policy, there’s generally an exclusion for business-related liability. 

General Liability pays losses arising from real or alleged bodily injury, property damage, or personal injury on your business premises or arising from your operations.

Broad Range of General Liability Protection

• Bodily Injury, including the cost of care, the loss of services, and the restitution for any death that results from injury
• Property Damage coverage for the physical damage to property of others or the loss of use of that property
• Products-Completed Operations provides liability protection (damages and legal expenses up to your policy’s limit) if an injury ever resulted from something your company made or service your company provided
• Products Liability is a more specialized product liability insurance that protects your company against lawsuits from product-related injury or accidents
• Contractual Liability extends to any liability you may assume by entering into a variety of contracts
• Other coverage includes: Reasonable Use of Force; Borrowed Equipment; Liquor Liability; Non-Owned Vehicles (such as aircraft and watercraft); Fire, Lightning or Explosion Damage; Water Damage Liability Protection; Legal Defense Costs; Medical Payments; Personal Injury; Advertising Injury; and specialized liability protection for specific business types

A surety bond is a contract between three parties — the principal, the surety and the obligee – in which the surety financially guarantees to an obligee that the principal will act in accordance with the terms established by the bond.

A principal’s “obligations” could mean complying with state laws and regulations pertaining to a specific business license, or meetings the terms of a construction contract, depending on the type of the surety bond.

If the principal fails to meet their agreed upon obligations with the obligee, the surety may be required to resolve the dispute by paying a claim to the obligee. It is in this sense that a surety bond is similar to a form of credit extended to the principal by the surety.

Auto Insurance

As a business owner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel — liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the “principal insured” rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.

Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business.

While the major coverages are the same, a business auto policy differs from a personal auto policy in many technical respects. Ask your insurance agent to explain all the differences and options.

Aviation Coverage

Hull Insurance: With hull insurance, you can count on coverage for physical damage to your craft. This includes damage obtained while in the air or on the ground, and while the craft is not in motion. The coverage extends to the craft’s engine, controls, navigation and computer equipment as well as the hull itself.

Generally, these policies will not cover any lost or damaged personal effects on board, but liability insurance may offer some coverage for passengers’ lost, damaged or stolen items. Policies will have a deductible that is either a set dollar amount or that is based on a percentage of the loss.

Aviation Liability Insurance: Liability insurance for your aircraft covers the bodily injury of non-owners such as visitors and passengers. It also covers the property damage a non-owner might experience as well as medical payments for injuries obtained onboard.

Specialized Coverage: If the aircraft is used for business purposes, then corporate aviation insurance should be obtained to protect the company’s property. If the craft is used for commercial trips then commercial aviation is needed to help protect both your business and your customers. Some may find that they need additional coverage for the type of services they perform (such as law enforcement or emergency medical services) or the cargo they haul. Additionally, certain aircraft, such as helicopters, may need specialized coverage.

Errors and omissions insurance, also known as E&O insurance and professional liability insurance, helps protect you from lawsuits claiming you made a mistake in your professional services. This insurance can help cover your court costs or settlements, which can be very costly for your business to pay on its own.

What Does E&O Insurance Cover?
Errors and omissions insurance helps protect your business from claims of:

• Negligence
• Errors in services given
• Omissions
• Misrepresentation
• Violation of good faith and fair dealing
• Inaccurate advice

If someone sues your business for making a mistake in the professional services you’ve provided, this insurance can help cover your:

• Attorney fees, which can cost an average of $3,000 to $150,000.
• Court costs, like reserving a courtroom or paying for expert witnesses.
• Administrative costs to put your defense together, such as paying office managers or court reporters.
• Settlements and judgments, which can cost a couple thousand to millions of dollars.

Errors and omissions insurance only helps cover claims if:

• It’s filed within your policy period or the extended reporting period
• The incident occurred on or after your retroactive date
• The retroactive date means incidents that happen on or after a certain date in your policy are eligible for coverage.
• The extended reporting period helps cover claims filed within a certain period of time after your policy expires.

Why Do You Need Errors & Omissions Insurance?

Without errors and omissions insurance, the cost of liability claims can be so expensive that they could put your business at risk of closing. Even if your customer drops their claim, your legal expenses could still be thousands of dollars. And if you’re found at fault or agree to settle the claim out of court, you can expect to pay a large amount out of pocket.

That’s why it’s important to protect your business with errors and omissions coverage.