Commercial liability insurance cushions a business against risks and damages that arise from operations, and does cover legal liabilities owing to accidents and damage to reputation.
Different insurance providers might define commercial liability coverage differently. Despite this, most schemes generally include similar risk covers.
Damage to property and bodily injury
This particular inclusion refers to non-professional acts of negligence that cause damages or liability. These are acts that occur in the premises of or due to operations at an organization.
Personal and advertising injury
Commercial liability insurance protects the insured against risks from offenses like slander, libel, defamation, false arrest, and malicious prosecution. It also covers risks from copyright infringement, theft of advertising ideas, wrongful invasion of privacy, forced entry, or eviction.
Most insurers also provide cover in cases of injury to a non-employee on the company’s premises or due to the company’s business operations.
Product liability and defense costs
Usually, commercial liability insurance providers also cover injuries caused to third parties from a company’s product. Sometimes, they also cover legal defense costs in addition to paying damages to injured parties.
Click here to know Exclusions of commercial liability insurance
Case study: Cover for property damage and medical expenses
Mr. Sen has a painting company. His staff visits contracted sites and offers turnkey solutions for painting and repair of new and old properties.
Recently, he got a call from one of his clients. She was upset because an entire bedroom wall in her house was wet. In fact, she claimed that the seepage was because one of Mr. Sen’s workers had left a bathroom tap running after repair work in the bathroom. Then, the client demanded a meeting and visited the company’s office. To make matters worse, she slipped and fell on the floor of the office, cut her lip, and threatened to file multiple damages against Mr. Sen’s company.
Investigations revealed that Mr. Sen’s worker had turned off the tap but not entirely. And the resulting seepage had severely damaged a wall. So, Mr. Sen would have to bear the cost of the repair. Additionally, he would also have to pay for the client’s medical treatment for the injuries she suffered from her fall in Mr. Sen’s office.
Luckily, his commercial liability insurance protected him against both the costs and saved him a great deal of money.
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