Operating a business can come with great rewards but also can come with its fair share of risk.
The liability part of business insurance provides protection from slip-and-fall lawsuits, the negligent acts of employees, and claims resulting from defective products. As the world continues to store more and more data electronically, loss of customer data can be added to the list of exposures just waiting to become claims. Cyber liability coverage can help protect you from this exposure.
One solitary, costly lawsuit is all it takes to shut a business down — sometimes for good. This is why business owners and business managers need to understand the liability risks in their business and prepare for them.
Most commonly, this is done by transferring the risk to an insurance company. When you transfer the liability risks to an insurance company, one of the most important parts of the liability policy is the “duty to defend” clause. This coverage can allow you to continue business operations while insurance attorneys handle interesting lawsuits such as:
Your employee is at-fault in an auto accident after business hours. Your employee was found to be talking on a cell phone when the accident occurred. The cell phone provided by you. You were sued because you provided the employee with the phone.
Using a similar example as above, replace “cell phone” with “pager.” Pagers are not as common as they once were but they’re still used. In this case, the business owner was sued when their employee was ruled at-fault in an accident because the injured party claimed the pager made the employee “on call” 24/7 so they were acting in their employer’s interest when the accident occurred at 11 p.m.
A manufacturer’s representative distributes the product of a food manufacturing business. One of the representative’s clients finds the remains of a rodent in the container the rep took from the post office directly to the consumer. Although the representative had nothing to do with the contents of the container, they were named in the lawsuit. This claim can go all the way up the chain from representative to wholesaler to the maker of the container to the actual manufacturer of the product.
A grocery store customer accidentally drops a half-gallon of milk causing the milk to spill onto the floor. The same customer slipped and fell when leaving the scene of the leaking milk carton. You guessed it, the customer filed a lawsuit against the grocery store. In this specific case, there was no negligence by the store owner but she was able to avoid the costly defense of this frivolous lawsuit because of her business liability insurance.
I share these cases with you to show that besides the normal liability risks you face every day with your specific business, there are risks you can never predict. Working with the right independent agent can put you with an insurance company to help protect you from the unexpected.
For other questions about your business insurance, contact Paul Pukis at Mosaic Insurance Alliance at 425-320-4280 or SuperAgent@MosaicIA.com.
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