Who is covered under my business liability insurance?
Every liability insurance policy is different. Who is covered by your liability insurance depends on a few factors, including the type of insurance and any modifications made to the policy.
Who does general liability insurance cover?
Nearly all businesses choose to carry general liability insurance to protect themselves. A general liability insurance policy will cover claims against the named insured (the person or business listed on a policy’s declarations page) and other various parties that also qualify for liability coverage. The policy typically provides liability coverage for:
- Your business
- You
- Your employees
- Additional insureds, such as subcontractors
The policy may step in when any of these parties are sued for their role in causing third-party bodily injuries or property damage either at your office or a client’s.
For example, if a visitor trips and falls at your office or an employee accidentally damages a client’s brand-new laptop, your policy can help cover expenses, including:
- Attorney’s fees
- Medical bills
- Damages you may owe
Who is covered under errors and omissions or professional liability insurance?
Errors and omissions insurance (E&O), also called professional liability insurance, covers lawsuits when clients claim you made a mistake that hurt them financially. The policy will typically provide liability coverage for:
- Your business
- You
- Your employees
Contractor liability coverage
Contractors are not technically employees, so your liability insurance may or may not cover them. Talk to a TechInsurance agent to find out who is covered under your errors and omissions insurance policy.
If you regularly hire contractors or subcontractors, you may want to require them to have their own errors and omissions insurance due to the potential for liability. If a client holds your business liable for work mistakes, data breaches, or negligence, they might sue everyone involved.
If independent contractors don’t have their own professional liability insurance, it can place a greater financial burden on your business. It's also worth noting that some clients may not want to work with you if your contractors don’t carry their own liability coverage.
Who is covered by cyber liability insurance?
If your IT business or a client suffers a data breach, cyber liability insurance can help pay for legal fees, customer notification, and fines. There are two kinds of cyber liability insurance.
First-party cyber liability insurance
This policy provides liability insurance coverage for your business when you suffer a data breach. This policy can cover expenses including loss of income, extortion, customer notification, credit monitoring, and damage to your reputation.
Third-party cyber liability insurance
Third-party cyber liability insurance provides coverage if a client suffers a data breach or malicious software attack and blames your company for failing to prevent it. It will help cover your legal fees if the client decides to sue your business.
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