Why Should You Invest in Liability Insurance?

general liability insurance

Liability insurance offers protection from the financial impact of an unexpected lawsuit. It’s often included in broader policies such as auto and homeowners or can be purchased separately as an individual umbrella policy.

It’s essential to re-assess liability coverage annually. An increase to the limits can usually be made with little change in the monthly payment.

Insures Your Business

Liability insurance Newark DE typically covers claims resulting from a business’ actions. This includes bodily injury (like a customer slipping on an icy walkway at your store) and property damage. It protects businesses from copyright infringement, advertising injury, and reputational harm. Clients may even insist on it before doing business with your company.

A liability policy can pay for legal costs and settlements up to the coverage limit. Umbrella policies, designed to cover catastrophic losses, can extend the boundaries of other approaches.

Business owners must remember that no matter how careful they are, there’s always a risk they or a staff member will make a mistake that injures someone or damages property. Such errors could spell financial ruin for a small business without appropriate coverage. Liability insurance protects a business from these risks, helping it thrive. Some recommend all businesses have this essential protection in place. It’s a wise investment that can help keep companies in the industry and protect owners’ assets.

Protects Your Assets

When it comes to asset protection, wealthy individuals often think of hedging against market losses, managing tax exposures, and buttoning up estate plans. But they also should consider how much wealth could be lost in a lawsuit.

Liability insurance protects insureds from paying out enormous sums in case of a claim or lawsuit. Typically included in auto and homeowners policies and business owners policies (BOPs) for businesses, the insurance helps pay for legal costs and settlements up to a specified limit.

Additional coverage, like an umbrella policy, is wise for people with significant assets. According to a company that provides insurance comparisons, adding an extra $1 million in liability coverage to your existing policy doesn’t increase your premium much. This is one of the most important ways to safeguard your assets, especially given our litigious society. It’s part of an overall asset protection strategy, including emergency savings, diversifying investments, and protective trust structures.

Insures Your Assets

Those assets that make up your wealth can be at risk if you are found liable in a lawsuit. Those assets can include your home, car, and financial accounts.

Liability insurance is a standard part of most homeowner and auto and business owners’ policies (BOPs). It helps pay for legal defense costs and court-awarded settlements that result from a lawsuit up to a specific limit set by the policy.

Individuals who want to maximize their protection can also consider personal umbrella coverage, which is available from most insurance agencies that sell homeowners and auto policies. These supplemental policies usually provide up to $5 million in coverage and protect your assets beyond the limits of other personal insurance policies. The cost is reasonable.

Ensures You for Negligence

Mistakes and accidents can still happen even with the most stringent safety precautions and risk management strategies. If those mistakes cause harm to others, you can be held liable for the damages. Liability insurance provides financial protection against the cost of those mistakes—up to your policy limits.

A single negligence claim can quickly bankrupt your business. With liability insurance, you can shift the burden of those claims to someone with deeper pockets: your insurer.

A professional liability insurance policy can protect your reputation against damage caused by your work for clients. However, most policies won’t cover gross negligence (which typically involves an extreme disregard for the safety of others). This is why it’s essential always to be mindful of your actions and ensure they aren’t likely to result in a liability lawsuit.