Understanding Liabilities

A liability is a risk of harm (personal, financial or physical) you pose to another party. In a business, liability parties are people like your clients, vendors, or indeed anyone with whom you might interact. They don’t even necessarily have to be people. They could even be other businesses.

When you cause harm to someone else, they could sustain a personal financial loss. Yet, because your fault or negligence might have caused the accident, you might have a responsibility to repay them. Liability insurance can help you do that. It can not only help you cover the third party's damage costs, but also could help you protect yourself from personal losses. For example, it might help you pay legal bills your company faces in a lawsuit brought by another party. Liability insurance can help you meet those costs. Therefore, you can protect your own operation from severe financial losses.

The Basic CGL Policy

If you have standard commercial insurance, like a BOP, you will likely have commercial general liability insurance (CGL coverage). CGL insurance is more or less the most-basic type of liability insurance. It will apply to those risks that are most-likely to arise in the business. In most cases, the covered CGL risks are:

• Bodily injuries: This is the physical harm you might cause to someone else.
• Property damage: Damage you cause to someone's property will fall into this category.

Bodily injury coverage can help pay for things like an injured person's medical bills, rehab costs and other legal settlements. It does not provide workers' comp. One of the most-common reasons to use this coverage is to cover the costs of injuries of someone who slips in the store, falls and then decides to sue you for their losses.

Property damage coverage applies to the physical losses you cause others. For example, if you make house calls, and while painting, spill paint all over someone's antique furniture, this coverage can help you pay to repair the damaged item. In other cases, the coverage can even help clients who rent properties cover damage to the building itself. You don't own the building, but the landlord might hold you responsible for any damage you cause the building. CGL property coverage might help you pay for damage costs or legal fees.

Beyond CGL coverage, there is a lot of other liability insurance for businesses. You probably need some of it. Contact an agent at Raymond Longoria Insurance to determine your eligibility.