FRIDAY, APRIL 30, 2021
What Could I Lose if Someone Sues My Business?
When you’ve spent years building your business, you want to be able to secure it for the future. However, you never know when a challenge might arise that puts you in a financial bind. One of these problems might be a lawsuit lodged by someone who alleges that you caused them harm.
Corporate lawsuits and other legal actions could be financially devastating if you aren’t prepared for them. However, being prepared means investing in proper liability insurance, which provides the necessary benefits to protect you against legal action. Here’s how it works.
Your Business’s Legal Liability
When someone visits your business or engages your services, they expect you to do your job without a hitch. Therefore, if something were to go wrong, then they might expect compensation and sue you in order to get it.
A lawsuit is nothing to treat flippantly. They could lead to significant legal costs, even if the claim never makes it to an actual courtroom. Furthermore, the costs of a settlement might be astronomical, and under the circumstances your business might not be able to adequately afford the costs of restitution.
For example, if someone were to fall in your business, sustain an injury, and then sue you, they might request restitution for:
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Medical bills
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Recovery costs
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Lost income
If your business was liable for the injury (meaning you were ultimately responsible for it) then you might have to repay this person. It’s easy to see how costs like those above could lead to tens of thousands of dollars in losses for the business, and you want to be able to protect yourself against them. At this time, your commercial benefits can play a lifesaving role.
The Benefit of Liability Insurance for Lawsuit Costs
If you want protection against the ramifications of lawsuits, then the benefit to enroll in is liability coverage. While there are many forms of this benefit, they’re all designed to help the business make restitution to third parties who suffered harm as a result of their mistakes.
Coverage needed by most businesses includes:
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General Liability Insurance: Covers costs of bodily injuries, property damage, product injuries and personal injuries (libel, slander) to others.
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Errors & Omissions Coverage: This benefit pays when your professional advice or services cause clients a financial loss.
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Directors & Officers Coverage: Should company officers become the personal target of a business lawsuit, this coverage will protect their personal assets from loss.
By filing against liability coverage, you’ll be able to have your benefits pay for the costs of lawsuits, including both settlements and your legal fees, rather than trying to dig into your financial reserves to do so. Therefore, coverage is instrumental in helping you preserve your financial security even though your mistakes have caused you to face challenges.
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It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
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