In the recent decades, we have seen increased instances of liability litigations and lawsuits. Millions of dollars are awarded for malpractice lawsuits. Every professional and businessperson must become familiar with the need for liability insurance to protect against possible lawsuits and claims on account of products or services rendered.
General liability insurance
Every business needs to protect itself from a variety of liability exposures. General liability insurance prevents a financial disaster resulting from any legal action. This encompasses losses from bodily injury, property damage or personal injury. Even small mishaps can result in large lawsuits that can spell disaster for any business. Liability insurance protects the business and its assets from accidents that occurred on the business premises or products sold by the business. Usually general liability coverage includes cost of settling claims, in case the lawsuit is proved to be true.
Some other liabilities are covered individually under separate policies and do not come under the purview of general liability insurance. Some of them include workers compensation and professional liability and product liability insurance. Liability rates would depend on the risk factor involved. If steps have been taken to reduce the risks and an effective loss prevention method is in place, it may substantially reduce the premiums on liability insurance.
The deductible amounts and coverage would hinge on industry standards. General liability insurance usually offers protection against bodily injury, property damage, contractual liability and other coverage such as legal defense costs and advertising injury. General liability insurance can be clubbed as part of Business Owner's insurance. The liability insurance rate is determined by the state in which you operate and its history for damage amounts to plaintiffs as well as the perceived risk to the business. Compensatory and general damages are covered but punitive damages are not covered under general liability insurance.
Professional liability insurance
Professional liability was initially created for doctors, lawyers, architects and engineers, but over time has come to be applied to allied healthcare professionals, business managers, and software professionals and others. Professionals may have lawsuits filed against them for failing to use their degree of skill expected of them for services rendered. Professional liability insurance protects against claims of libel, slander, and invasion of privacy.
There are many factors on which premiums for professional liability are arrived at - the profession, the potential for claims being filed and their severity, number of years in practice, location of the business, number of professionals covered and the annual revenues from the profession. Individual coverage requirements also need to be considered. Professionals can avail discounts for newly licensed practice or group discounts. Even hairdressers and dog groomers are taking to professional liability insurance.
Product liability insurance
Product liability insurance is important for any business that sells manufactured or assembled products. Product liability insurance rates depend on the product - how dangerous it can be. Product liability insurance protects a business from claims made by others for injury and other damages caused by the products. Product liability insurance provides coverage against safety claims, manufacturing defects, spoilage costs, medical costs and legal defense costs. You will need to contact a specialist insurance broker who can suggest a policy that covers all the requirements of your business.
Medical liability insurance
Medical liability insurance rates have risen sharply and it is increasingly difficult for healthcare professionals to secure affordable liability coverage. This in turn pushes up the cost of healthcare. It was noticed that medical liability insurance rose by nearly 33% for surgeons and about 22% for obstetrician-gynecologists in the last few years.
This is partly due to the increased medical malpractice lawsuits as also the fact that a number of insurers have withdrawn from the market. Limiting medical malpractice lawsuits and awards or setting a cap on non-economic damages may help in reducing exorbitant premiums on medical liability insurance policies.