Liability insurance has four major roles in a commercial setting…
- To defend you and your company
- If your company should be sued, your liability insurance will provide the necessary defense for the lawsuit.
- To indemnify
- The insurance company will pay the funds for which the insured is held liable up to a set policy limit.
- To settle reasonable claims
- When the settlement demand equals or exceeds the policy limits, the duty to settle will become applicable.
- Effects of breach
- If a commercial insurer breaches the listed duties, the company will be held liable for the tort of insurance bad faith and also a breach of contract.
Some people think that they do not need commercial liability insurance because of the field that they are working in. Talking with an insurance agent about possibly liabilities can provide a better insight concerning liability insurance. No matter what field you are working in, you have to understand that liability costs can be excruciating.
Commercial liability insurance may be intimidating if you have not done your research. But, the more that you understand about your business and how useful commercial liability insurance can be, the easier it will be to understand the need for this type of insurance in almost any professional setting.