subject: What Is Liabiltiy Insurance [print this page] Liability Insurance; what is it and why do you need it? Basically liability insurance protects you from a lawsuit. If you have a rental property that you accept rent for each month as your business, you need liability insurance. If your business is selling food to customers, you need liability insurance. Or if you sell services as your business, whatever your business, you'll need liability insurance. Liability insurance protects the buyer and the seller in a business deal.
In the past, before liability insurance existed, business owners would get together with other business owners and create a type of fund that all were able to pull from is there was a business loss in their business deals. Theirs was a mutual agreement with a fund of money included in their business deal as a type of liability insurance. Now, business owners pay an insurance company for their own liability insurance. An example of a professional business that would need liability insurance to cover the business buyer and the business seller is a carrier or freight business. Often times a freight company will offer a liability insurance fee to the customer as an option to pay a small insurance fee on their freight product. If the customer doesn't pay the liability insurance fee then their product isn't covered under the temporary insurance if there happens to be damage or a mistake in mailing.
A business who would need liability insurance for their employees rather than their customers may be an auto repair company whose employees are constantly working on auto machines. Another example would be a wood-working business. This type of business where employees are constantly working with machines would be wise to have liability insurance for their machines in the case that there is a mistake on the employees part in misfiring the machine and something being broken or an employee getting injured. A business could face legal issues if an employee sues for money to cover problems not of their fault in working for the business.
Knowing that liability insurance protects a business in potential legal issues is important as you consider and search for the type of liability insurance you want and what you want to cover with liability insurance. Every general business insurance policy will usually have some type of liability insurance within the business insurance policy. There will also be property insurance in a business insurance policy. The thing to consider and search for in your business insurance is what type of liability insurance does your business need.
Not every business will be covered by a general business insurance policy. Depending on your business product or business services, you may need some extra liability insurance. For instance, a dental office may want more liability insurance than the general small business insurance policy. There are many expensive tools in a dentist office and obviously the property insurance part of a dentistry's business insurance policy is important, but there must be some legal protection for the dentist, dentistry team, dentistry tools and machines, and the dental patients. Whatever your business, consider what type of liability insurance you would need to protect your business in a potential legal matter.
by: Leland Saul
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