Here are some quick facts about business liability insurance:
- It can help you protect your company against legal claims.
- It can help you cover costs for personal injury, property damage and advertising that’s false or infringes on a trademark.
- Separate liability coverage is available for damages and injury caused by products or services.
- You can add coverage for specific risks, such as data breaches.
Question I plan on opening my own business within the next year. I want to make sure I’m properly insured from day one. What exactly does business liability insurance cover?
Farmers Insurance® agent Joel Brekken of Duluth, Minnesota, explains how business liability insurance can help you protect your operations.
Answer I’m glad you’re already thinking about insurance for your business. Your risk begins the moment you open the doors. And keep this in mind as you consider your options: You can start with a certain amount of coverage, then easily change your coverage as your business grows.
Liability insurance is there to help you cover costs when someone — a shopper in your store, for example — blames you for a loss or injury. Our business policies always include general liability insurance coverage, which can help you cover your financial responsibility for a range of business-related accidents. Examples include:
- A visitor slips and falls on a wet floor at your store.
- You break a customer’s window while making a delivery.
- A metal sign falls off your building and lands on a car.
- Your advertising says something false, violates someone’s privacy or infringes on a copyright.
Risks like these come with the territory for most companies. That’s why general liability coverage is an essential part of business insurance policies.
But your business may carry risks specific to the products or services you provide, as well. So you can add other kinds of coverage tailored to those risks. Let’s say you make waterproof bags for smartphones. A production glitch one day results in some leaky bags, and your customers’ phones are ruined. Or maybe your landscaping company accidentally damages an expensive backyard grill while installing paver stones. You can choose coverage that can help pay to repair or replace the damaged property.
You can also add coverage for cyber liability in case you accidentally expose a customer’s personal information online. If you have employees, you may want to consider general liability insurance coverage or employee practices liability insurance (EPLI), which helps cover employment-related claims like harassment or wrongful termination.
When selecting liability insurance for your business, it’s important to identify the risks you face and understand how insurance can help cover them. As I tell my customers, it’s your livelihood, and you can choose how to protect it.
The information contained in this page is provided for general informational purposes only. Read our editorial standards for Insurance Questions and other content. We make no representations or warranties of any kind, express or implied. This does not refer to any specific insurance policy and nothing herein is intended to replace or modify any terms in your actual policy.
Farmers may also provide information on topics that are not directly about insurance policies or coverage that we believe could be helpful to you. Information in such articles is not meant as professional advice, and any reliance you place on such information is therefore strictly at your own risk.
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