Business Law Breakdown: Business Liability Insurance

Most insurance companies that provide liability will hire a lawyer to defend you and also have money to pay to settle a claim or to pay a judgment. However, some policies are wasting policies, which means that the money that is spent to defend you is reducing the amount of available settlement value.

Types of insurance include:

General Liability Insurance

General liability will cover slip and falls, or property damage, negligence claims of that sort.

Errors and Omissions Insurance

Errors and Omissions typically cover professional negligence for doctors, lawyers, engineers, and other professionals of that sort, for damage caused by failing to do what they promised to do.

Directors and Officers Insurance

Directors and Officers Insurance covers the directors and officers of corporations against shareholder lawsuits or other claims that they breached their duties in their capacity as a director or officer.

Commercial Auto Insurance

Commercial auto is important if your business has people driving around in cars. If they have an accident, you want to have coverage for the business to protect against a liability claim.

Employment Practices Insurance

Employment practices insurance is often overlooked but can be very important because employment claims are a very common form of claim against small businesses. This protects against claims of discrimination under Title VII, or the Americans with Disabilities Act (ADA) or other claims of that nature.

Reservation of Rights

Frequently, a lawsuit will have more than one claim involved. So, there will be a claim of negligence, coupled with a claim of breach of contract. The insurance may not cover the breach of contract, and may say, “we reserve our rights to deny with indemnity with regard to the uncovered claim.” They will then send you a reservation of rights letter.

You should consult an independent lawyer who represents only you when you get a reservation of rights letter. There is a rule in Texas that if there’s a demand that comes in for settlement below the policy limits, the insurance company is required to accept that if it’s a reasonable demand.

If they fail to accept the reasonable demand within policy limits, they may be required to pay the excess judgement that is over the policy limits at a later time.

Have questions regarding business liability insurance? Contact our office today.