Business Liability Insurance

AAA

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.

INVESTOPEDIA EXPLAINS '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. Professional Liability Insurance

    Insurance that protects professionals such as accountants, lawyers ...
  2. Business Insurance

    Insurance coverage that protects businesses from losses due to ...
  3. Business Interruption Insurance

    A form of insurance coverage that replaces business income lost ...
  4. Business Owner Policy - BOP

    Insurance policies that combine protection from all major property ...
  5. Limited Liability Company - LLC

    A corporate structure whereby the members of the company cannot ...
  6. Partnership

    A business organization in which two or more individuals manage ...
Related Articles
  1. The History Of Insurance In America
    Home & Auto

    The History Of Insurance In America

  2. Will Insurance Keep Your Business Safe?
    Entrepreneurship

    Will Insurance Keep Your Business Safe?

  3. New Year Planning For Business Owners
    Entrepreneurship

    New Year Planning For Business Owners

  4. Don't Get Sued: 5 Tips To Protect Your ...
    Entrepreneurship

    Don't Get Sued: 5 Tips To Protect Your ...

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. 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 ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center