Liability insurance covers accidents that occur for which your business is legally liable (responsible). Note that you can be held liable for the actions of people who work for you, paid or volunteer, if they are operating within the scope of their duties.
If you, or one of your employees, is at fault for an accident, you may be expected to reimburse the cost of damages to another person for their injuries or loss of property resulting from that accident. This includes incidents involving your vehicles, as well as those which may occur on your businesses premises (for instance, someone slips and falls). You also can be liable for injuries incurred by the use of your products (product liability) or by your actions (professional liability, as in malpractice).
If you use your personal vehicle in your business, there is a possibility that your personal auto policy may not cover liability claims for damages resulting from an accident during the conduct of business activities. Ask your insurance agent about the limitations of your current policy and whether you need a Commercial Auto Policy, or a business endorsement to your Personal Auto Policy.
There are many instances in which your business could become legally responsible for another person's claims of damages resulting from your actions or the actions of those working on your behalf. If you have insurance, the insurance company takes the problem off your hands and pays for the damages up to the limits you have chosen for each policy coverage . In addition, if you are served with a lawsuit, the insurance company absorbs all defense costs (including hiring an attorney on your behalf) and handles all the legal issues, even if the suit is frivolous.
Liability insurance takes care of claims for injury or damage to property or people. In choosing the insurance you need, take a look at your operations and consider the possible exposures from which you need protection.
