The Role of Business Insurance in Lawsuit Protection

Your business may face daily risks from various potential sources. Incidents affecting your company’s property or directly impacting its financial interests may be the first threats to come to mind. Still, many organizations must also account for situations in which other parties may blame you for their own losses. Should your organization face these allegations and accompanying lawsuits, a well-crafted business insurance package can make all the difference.

How Can Business Insurance Address Lawsuits?

You should first understand that business insurance may not be available as a prearranged package capable of addressing all possible lawsuits and incidents. Different types of policies can offer varying coverage that may assist in responding to certain situations. Building a versatile business insurance portfolio according to your company’s risks and exposures is critical and can help pay for resulting costs, such as attorney fees, settlements and judgments.

What Types of Insurance Should My Business Have?

Consider how the following types of policies, each a common fixture of business insurance, may help address lawsuits:

• General liability insurance—As one of the most common facets of business insurance, these policies can address legal proceedings following third-party losses arising from bodily injuries, property damage and personal and advertising injuries.
• Professional liability insurance—Also known as errors and omissions insurance, this type of coverage can financially assist with lawsuits if a client or customer alleges that your business provided inaccurate advice, made a professional error, or otherwise provided inadequate services.
• Commercial auto insurance—Your business’s commercial auto policy should include liability coverage, which can help you respond to lawsuits following vehicle accidents for which your business or employees are allegedly at fault.
• Cyber liability insurance—If affected parties file a lawsuit following a cyber incident or data breach, this type of insurance may insulate you from out-of-pocket losses.
• Workers’ compensation insurance—These policies typically include employers’ liability coverage, which can render financial aid if an employee is injured on the job or develops a work-related illness and sues your business.
• Employment practices liability insurance—This type of policy can assist in funding your defense and limit losses if a current, former or prospective employee sues your company for wrongful workplace practices, such as wrongful termination or harassment.
• Commercial umbrella insurance—Establishing a secondary layer of liability coverage, these policies can offer additional aid if a lawsuit exhausts the coverage limits of other policies, such as general liability and commercial auto.

We’re Here to Help

Contact Statewide Insurance Agency in Murray, UT, today to learn more about how the right coverage can offset lawsuit-related losses and expenses.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.