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Liability Insurance Facts Business Owners Should Know

by Lalithaa

Getting the right amount of liability insurance is essential for your financial stability. There are many things to know about liability insurance. In this article we will discuss some liability insurance facts, such as coverage limits, deductibles, and exclusions. You can also read up on some common types of coverage. These include Homeowners, Errors and omissions, Directors and officers, and General liability policies. You can also use these facts to compare policies and find the best coverage for you.

General liability

If you’re wondering what liability insurance is, you’ve come to the right place. Liability insurance is a part of the general insurance system and protects the purchaser from lawsuits or similar claims. You may be sued because of a product or service you sold, but liability insurance protects you from these risks. Find out the basic facts about liability insurance below and learn more about it today. Also, make sure to get the coverage that meets your specific needs.

Errors and omissions

Errors and omissions insurance covers costs for lawsuits arising from professional mistakes. While a Business Owners Policy may provide some protection, it is not enough. Errors and omissions insurance is a vital component of liability insurance, and is also required by some regulatory boards. Real estate agents, for example, must show proof of E&O insurance to their state licensing board before receiving their license.

Directors and officers

While directors and officers may not be required by law to purchase their own liability insurance, many companies do, and even if they don’t, they can be exposed to large coverage gaps. Fortunately, directors and officers liability insurance has several benefits and can help you navigate lawsuits and negotiate settlements. It can also save you time and money by covering expenses that arise when a lawsuit is filed against you. For example, directors and officers liability insurance can help protect you from claims related to workplace health and safety, environmental pollution, and consumer protection. Additionally, it can cover claims related to corporate and securities law.


The basics of homeowners’ liability insurance include covering medical costs for visitors, pain and suffering, lost wages, death benefits, and legal expenses. While most homeowners policies come with this coverage, you need to know that it has limits. These limits can be low enough that you aren’t covered if something happens on your property, but if you rent out your home frequently, you may want to consider upgrading your coverage. The Insurance Information Institute recommends at least $300,000 in liability coverage.

Umbrella coverage

Umbrella coverage in liability insurance provides additional liability protection in the event your other policies aren’t sufficient. This is commonly covered in injury law as you can see from the lawyers you can talk to when you click here. If you’ve been sued for a wrongful act, this extra coverage will pay out if your other policies’ limits aren’t enough. Umbrella policies are written over your existing liability policies, and their limits drop down once your primary policies’ limits are exhausted. They offer additional protection against some claims that aren’t covered by your underlying policies, and they are usually written as self-insured retention policies.


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