When you started your business you made the choice to form an LLC. You were told that it would provide great protection for you. The LLC limits your personal liability and protects your personal assets like your home and savings from potential suits. But what protects your LLC?
You had considered insurance for your business when you started. It may have been a little ambiguous as to the coverages that were needed, and how to go about getting the proper coverage.
That is why it is always best to contact a local, trusted agent. You can ask the agent you trust with your home and auto. They will direct you
to a business specialist that can help with the protection of your business as well.
Here are the items you want to consider:
Typically, an LLC will not protect you if a claim is made against your business because:
- You acted negligently or irresponsibly
- If you get sued when you did nothing wrong
Of course, no business owner plans on acting negligently or irresponsibly. But accidents happen. And even the most honest business owners can make a mistake. And your business can be sued even if you’ve done nothing wrong. That’s why it’s important to carry General Liability Insurance. General Liability Insurance can also help handle the bulk of the work involved in a claim. As an LLC, you must respond to complaints and would have to hire your own lawyers. With General Liability Insurance, the insurance company helps handle much of the legal efforts, which allows you to remain focused on running your business.
A General Liability Insurance policy can help cover the cost of claims against your business for things like:
- Third Party Bodily Injury. If a person is injured on your business property, he may make a bodily injury claim against your business. For example, a package delivery man trips on loose carpeting in your accounting office, falls and breaks his wrist. General Liability Insurance can help cover the costs of the bodily injury claim he makes against your business for this accident.
- Third Party Property Damage. If you or someone on your payroll damages a third party’s property, you may face a property damage claim. General Liability Insurance can help cover the costs of property damage claims made against your business. For example, an employee using equipment on your business property accidentally damages your neighboring business’s office. The neighboring business makes a property damage claim against your business. General Liability
Many people do not understand the difference between third party and second party claims
As a business owner, when you sign a contract to perform work or services for the exchange of payment that is a 2 party contract. You being the 1st party, the customer/contract owner, the 2nd party. General liability is not the coverage for this type of agreement. You will be denied coverage for acts of negligence or dishonesty, between the 2 parties.
General Liability vs. Professional Liability Insurance
General Liability and Professional Liability Insurance both help protect your business from the costs of liability claims. They differ in the types of claims they cover. Professional Liability Insurance covers the costs related to claims your business committed errors or omissions in the operations, services or products it provides.
For example, Professional Liability Insurance typically covers claims of:
- Errors in professional services your business provided
- Failure to uphold contractor promises
- Incomplete work or work not done to expectations
- Mistakes and omissions in professional work performed
I hope this is helpful. You can contact me to help you determine the best coverages for your business.
Gibraltar Insurance Services