If
you are a plaintiff or a defendant in a commercial lawsuit, you face
the prospect of paying for an array of expenses and possibly even
losses. The typical business interacts with a number of diverse
parties on a daily basis. From customers to merchants, vendors and
contractors, there's plenty of potential for things to go wrong. A
business that plans for such scenarios will take out a commercial
general liability insurance policy.
Liability
insurance protects businesses against claims of bodily injury,
property damage, slander, libel and plenty of other legal attacks
concerning the business's activities. This type of insurance policy
will protect businesses from a number of angles. Its indemnity will
cover the costs associated with the business owner's legal defense.
Many small business owners have actually found that certain clients
require that the business has a general liability insurance policy in
place before they'll sign a contract. So businesses that plan ahead
for potentially damaging unforeseen circumstances and secure
liability insurance will actually boost their chances of recruiting
customers.
Yet
the crux of a liability insurance policy is to protect the business
in the event that unexpected events threaten its viability. The
policy provides the financial resources that are necessary to keep
the business operational no matter what type of lawsuits are
presented by customers, vendors, merchants or other parties. In
short, liability insurance offers financial protection against risks
that even the most careful business owner can't avoid. The truth is
that we live in an overly litigious society. People are willing to
sue other parties, especially businesses, with little evidence in the
hopes of finding a sympathetic judge or a business that doesn't want
to bother with the complexities and annoyances of the legal system.
A
liability insurance policy will also pay for the costs of both
defending and investigating a lawsuit or claim. It will cover the
associated court costs, police report costs, the premium on
court-mandated bonds, witness fees and attorney's fees. Additionally,
the insurance policy will pay for all reasonable expenses that arise
when the business owner is asked to defend himself. For example,
he'll be provided with the income that he loses by spending a day or
two in court.
Most
importantly, a liability insurance policy covers both judgments and
settlements that are produced from covered suits. If your defense is
not successful, the insurer will even cover the interest that is to
be paid on the judgment as well as the injured party's medical
expenses.
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