Workplace Liability: How Commercial Insurance Offers Legal Protection

commercial insurance claim document with pen and glasses on table

What if your successful business was secretly doomed to fail? If you don’t have the right commercial liability insurance, then it may already be happening! 

This insurance is the cornerstone of any major business because it offers the legal protection that your business deserves. 

How does commercial liability insurance work and how does it provide the legal protection you need? Keep reading to discover the answers. 

What Is Commercial Liability Insurance? 

As the name implies, this is a special type of insurance designed to protect you against potential workplace liability claims. Without enough liability protection, a single lawsuit could potentially put you out of business. Even if you ultimately win your case, the costs of a legal defense can cripple most small- to medium-sized businesses. 

We are going to guide you through why the right liability insurance is so important for your legal protection and, ultimately, your business.  

What Does Commercial Liability Insurance Cover? 

The two biggest things this insurance covers are bodily injury (when someone believes your business caused them physical harm) and property damage (when someone believes that your business caused damage to their property). On top of providing legal protection against lawsuits, this insurance also helps pay for the medical care of those who get injured. 

You should know that this insurance protects you from much more than this, though. For example, liability insurance helps protect you against things like copyright infringement claims and claims of slander or libel. These are all very important because they help you legally protect your reputation and, by extension, your brand. 

This insurance also provides coverage if a customer is injured by one of your products and wishes to sue you. Finally, it covers damages to the property your business rents. This is very useful in the event of fires, explosions, lightning strikes, and other unexpected events. 

What Does Commercial Liability Insurance Not Cover? 

It does not cover the employee injuries that would be covered by workers’ comp. Additionally, it does not cover discrimination lawsuits (for this, you would need a separate employment practices liability insurance coverage). It also doesn’t cover professional errors (for these, you need separate professional liability insurance). 

Finally, this liability insurance doesn’t protect property that you actually own. For example, while it can cover damages to rented property, you’d need commercial property insurance to cover damages to property you own.  

Similarly, you’d need commercial auto insurance to cover things like company cars.  

Earlier, we touched on how certain employee injuries are covered by workers’ comp. Let’s look at the relationship between commercial liability insurance and workers’ comp. 

employer going over workers comp paperwork

What Is the Relationship Between Commercial Liability Insurance and Workers’ Comp? 

The short answer is that workers’ comp covers injuries to employees and commercial liability insurance covers injuries to everyone else. For example, an employee who falls down the stairs while unloading a pallet would be covered by workers’ comp. But someone simply visiting your business who falls down would not be covered because they are not your employee. 

Your goal as a business should be to reduce your liability wherever possible and to maximize your legal protection. So if you are primarily relying on workers’ comp, then you are leaving yourself open to a number of potential lawsuits from other parties. And as we noted before, sometimes it only takes a single lawsuit to put an end to even very successful businesses. 

Legal Protection by the Numbers 

Sometimes, liability insurance can seem like a fairly abstract concept. You may go long periods without having to use it, and this causes some managers and CEOs to think that this insurance isn’t that important. 

To better understand why liability insurance is important to your business, it’s important to understand the potential financial costs to your business related to liability. For example, workplace fires cause an average of $35,000 of damage. Product liability suits also cost, on average, $35,000. Customer injury lawsuits cost an average of $30,000 while potential harm to your company’s reputation costs an average of $50,000. 

Most small- to midsized businesses don’t have $30,000-$50,000 worth of cash just lying around. Fortunately, liability insurance helps to protect your funds just as it helps to protect your business. 

How Much Does Commercial Liability Insurance Cost? 

On average, commercial liability insurance will cost somewhere between $30- $60 a month. As with most types of insurance, there is no “one size fits all” type of coverage. The exact amount you pay is determined by factors such as how many employees you have, where your business is located, the size and condition of the building, and so on. 

If you really want to get the best price on liability coverage, the answer is simple: You need to get multiple quotes and discover the plan that best meets both your coverage needs and your overall budget. 

Get the Best Commercial Liability Insurance Today! 

Now you know why commercial liability insurance is so important. But do you know where you can find the coverage that you and your company deserve? 

At InsureOne, we are always ready for you to get a quick and free insurance quote online. Alternatively, you can pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to come into one of our convenient nearby offices