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There is no way around it: Lawsuits are more prevalent today than ever. Ranging from legitimate to preposterous, litigation of any kind can be life-changing for plaintiff and defendant alike. Learn how obtaining more liability coverage can provide a vital layer of protection that can shield you and the business you have worked so hard to build.

What is Liability Insurance?

If you own a business, you should already have liability insurance. It protects you from being sued or held liable if injury to a third party, negligence or malpractice occurs. Most policies cover both your legal costs if you are sued and what you are ultimately required to pay in damages. Why, then would you possibly need additional coverage?

The Homeowners Policy Fallacy

Do you run your business out of your house? If so, you may be operating under a potentially disastrous misconception. Contrary to popular belief, your homeowner’s policy is probably woefully insufficient in terms of protecting your business from lawsuits.

Most home policies, for instance, only cover claims up to $300,000. Auto policies weigh in at $250,000 per person and $500,000 per accident. Property claims are even lower, generally around $100,000. Considering that many liability claims run into the hundreds of thousands of dollars, it is clear that homeowner’s coverage is not enough. A lawsuit, however baseless, could leave you bankrupt.

Gaps in Traditional Liability Coverage

Another problem with your existing liability insurance may be that it fails to compensate you in the event of certain claims, thus leaving you vulnerable. Defamation of character, libel, slander and false arrest are usually not covered.

If you operate a very specialized business that carries particular risks, you are most likely not protected against those either. In order to protect yourself, you would need to purchase additional liability protection specifically customized for the loss you are at risk of incurring. Examples of these kinds of packages include kidnap and ransom coverage, valuable papers insurance, key person insurance that helps you recover from the sudden loss of a colleague who is integral to the operation of your company and international operations coverage if your enterprise operates abroad.

Running a business is not for the faint of heart, but that doesn’t mean you need to walk on this tightrope without a safety net. Liability insurance can provide the added protection you need. Talk to your agent today to ensure that you have a sufficient amount of all types of the liability coverage you need.