Customers, employees, repair people, delivery people and anyone else who comes in contact with your business property can hold you liable for your failure to take the proper degree of care. This can be as simple as keeping your sidewalk swept or shoveling the snow on your front walk. If someone is injured as a result of your negligence, the court will generally find in favor of the injured party, even if your negligence was only slight.
Basically, there are two types of liabilities against which you have to insure yourself and your business: liabilities to nonmembers of the firm and liabilities to members of the firm (employees and partners). Most of the liabilities toward outsiders will be covered under a comprehensive general liability (CGL) policy. A CGL policy covers the following four risks:
- Payments due to accidents and injuries that might happen on your premises or to your employees;
- Any immediate medical expenses necessary at the time of the accident;
- The attorney fees and expenses for investigation and settlement;
- The cost of court bonds or other judgments during appeal.
The limits to liability are determined on a per-accident and per-person basis. Additional limitations may include a total on bodily injury or property damage.
A CGL policy does not protect you against all liabilities, however. These include:
- Liability caused by an employee automobile accident while on the job;
- Liability related to products manufactured or sold, or services offered, by your company;
- Liability insurance covered under workers' compensation laws.
For these, you'll need additional insurance coverage and should contact your insurance company to determine exactly what coverage you need.