Businesses cannot afford to be unprepared for a lawsuit. Liability insurance protects your business assets when the business is sued for something the business did (or failed to do) that contributed to injury or property damage to someone else. Liability coverage extends not only to paying damage, but also to the attorneys’ fees and other costs involved in defending against the lawsuit—whether valid or not.

The standard business owner’s policy provides liability coverage, as does a separate policy known as a commercial general liability (CGL) insurance policy. Generally, commercial liability insurance, whether purchased in a separate policy or as part of a standard business owner’s policy, will cover bodily injury, property damage, personal injury or advertising injury. The medical expenses of a person or persons (other than employees) injured at the business or as a direct result of the operations of the business are also covered.

Usually excluded from both types of liability insurance policies are suits by customers against a business for nonperformance of a contract and by employees charging wrongful termination, racial or gender discrimination or harassment.In addition, excluded are acts of certain types of professions. For example, medical malpractice by someone in the healthcare field, advice or actions of an attorney, or injury resulting from certain work performed. These types of liability exposures can be covered by separate policies known as professional liability and employment practices liability.

Check with your agent about the best liability protection covering all types of situations that may arise in your business.