Important Terms to Know About Liability Insurance
People should purchase liability insurance for protection against third party claims. Often called errors and omissions insurance, liability insurance protects small businesses and commercial businesses from risk. You can purchase this type of insurance through your insurance agent. Whether you’re a large or small business, choosing general liability insurance is a wise move. It’s also wise to consider liability insurance if your industry or profession is considered high risk. Get a quote on your coverage today from a broker. Here are some important terms to consider when getting liability insurance.
Indemnity: An amount paid from one person or business to another in the way of compensation for loss. This payout can come in the form of cash payments, repairs, replacement or reinstatement.
Bodily Injury and Property Damage Liability: Covered losses in this case may include a result of being hurt in a slip and fall at your place of business or property damage to your vehicle while parked at your place of business.
Binder: An agreement, while temporary, that states an insurance policy is in effect. This is to protect the insured party when the policy cannot be endorsed until later.
Exclusion: A restriction within business liability insurance that limits or excludes certain events or properties.
Risk Management: The process of identifying, measuring and controlling risks that may threaten a business’s assets.
Subrogation: The right of an insurance company to seek out legal action in a policyholder’s name against a responsible party who is liable for loss or damage.
Grace Period: A short period of time where insurance coverage continues beyond the policy’s expiration date.