Business Liability Insurance

DEFINITION of 'Business Liability Insurance'

Insurance that protects a company and/or business owner in the event of a formal lawsuit or other third-party claim. Coverage includes any financial liability incurred in addition to expenses related to the company's legal defense. There are three main types of business liability insurance: general liability insurance, professional liability insurance and product liability insurance.

BREAKING DOWN 'Business Liability Insurance'

If you are a small business owner, your form of ownership - especially a partnership or sole proprietorship - could put your personal finances at risk in the event of a business-related lawsuit. Even under a limited liability corporation (LLC) you could still be exposed to personal risk. Business liability insurance can provide you with greater insurance protection than is offered by your legal structure.

New or additional insurance policies should contain an exclusions clause to minimize cost by avoiding duplications of coverage provided in other policies and/or to eliminate any unneeded coverage.

RELATED TERMS
  1. Blanket Contractual Liability Insurance

    Liability insurance that provides coverage for all contracts ...
  2. Backdated Liability Insurance

    Liability insurance that provides coverage for a claim that occurred ...
  3. Adjusted Liabilities

    The liabilities of an insurance company that differ from the ...
  4. Business Legal Expense Insurance

    An insurance policy that provides coverage for expenses that ...
  5. Limited Liability

    A type of liability that does not exceed the amount invested ...
  6. Casualty Insurance

    A broad category of coverage against loss of property, damage ...
Related Articles
  1. Professionals

    Liability Insurance

    Liability Insurance
  2. Financial Advisors

    An Advisor's Guide to Prof. Liability Insurance

    A guide to what financial advisors need to know about professional liability insurance.
  3. Professionals

    Business Insurance

    Business Insurance
  4. Professionals

    Professional and Director Liability

    Professional and Director Liability
  5. Home & Auto

    Filling The Gaps In General Liability Insurance

    Standard liability coverage may not be enough. Special needs call for specialized policies.
  6. Entrepreneurship

    Insurance Coverage: A Business Necessity

    Don't go to work without this policy in place - especially if your work is in your home.
  7. Home & Auto

    Intro To Insurance: Conclusion

    By Cathy ParetoInsurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, ...
  8. Professionals

    Homeowner Endorsements and Auto Insurance

    Homeowner Endorsements and Auto Insurance
  9. Professionals

    Current Liability Basics

    CFA Level 1 - Current Liability Basics. Learn the basic types of liabilities, including definitions for current and long-term liabilities, warranties, taxes and vacation-pay.
  10. Home & Auto

    Cover Your Company With Liability Insurance

    Every business is susceptible to legal action. Find out how to protect yours.
RELATED FAQS
  1. When does it make sense to buy personal liability insurance?

    Protecting yourself from lawsuits is important to the financial well-being of you and your family. Is personal liability ... Read Answer >>
  2. What is the difference between an expense and a liability?

    Learn what liabilities and expenses are, which financial statements they are listed on, and the differences between liabilities ... Read Answer >>
  3. What is the difference between legal liability and public liability?

    Discover the differences between a general legal liability, a specific public liability and a professional indemnity in the ... Read Answer >>
  4. How much do changes in interest rates affect the profitability of the insurance sector?

    Learn about the relationship between interest rates and insurance company profitability, and how interest rates can affect ... Read Answer >>
  5. How might a company's contingent liabilities affect its share price?

    Discover what contingent liabilities are, and how and to what extent such liabilities may have an impact on a company's share ... Read Answer >>
  6. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center