How liability insurance safeguards your business

Liability insurance is an important way to financially safeguard your business, especially when mistakes or accidents risk damaging your bottom line.

Liability insurance can cover your business for claims of injury, property damage, professional negligence or reputational harm arising from your day-to-day operations. It can also pay for related legal defence and investigation costs.

Gallagher liability expert, Amanda Halfacree says that for small business owners, liability insurance is particularly important. “Just one accident or error, or even the allegation of such, can spark an expensive lawsuit and associated costs, which can threaten a SME’s survival. Liability insurance ensures that a single incident doesn’t wipe out everything you have worked hard to build up.

Different policies suit different business needs

Amanda says there is not a one-size-fits-all approach to liability cover as different types of businesses are exposed to different types of liability risk.

General liability cover, often referred to as public liability insurance, protects your business financially if you have been found liable for property damage or injury. This policy is often at the core of a liability risk management programme and covers legal costs to defend or investigate the claim.

Directors & Officers (D&O) insurance protects directors and company officers from financial losses incurred in the course of running and managing a company. As a company director, you can be held personally liable for both your own mistakes and oversights and for the failings of people on whom you have relied. 

If you offer professional services, such as working in a legal, accounting or engineering capacity, you face a different set of risks. Miscommunication, incorrect advice or unfilled expectations can lead to claims of financial loss or reputational damage.

“Even if you’re not at fault, defending yourself can be expensive. That’s where professional indemnity insurance comes into play. It covers legal defence, settlements and damages, ensuring that one claim doesn’t undermine your entire business,” explains Amanda.

Employment issues sometimes result in personal grievance claims by employees or prospective employees. Employment disputes cover covers you for allegations of wrongful dismissal, discrimination, harassment and other unjust treatments.

How do you make sure you have the right cover?

Protecting your business from costly liability claims starts with understanding your areas of vulnerability. Your Gallagher insurance broker will work with you to understand the types of risks you face, identify the types of policies you need and determine the amount of cover for your needs.

“Every business is unique and having tailored liability coverage can make the difference between a minor setback and having to close your doors permanently,” says Amanda.  

“While you want to avoid paying for unnecessary coverage, it’s equally important not to be underinsured. Opting for the cheapest policy might be appealing in today’s environment but you need to assess what level of risk this approach holds for your business.”

Amanda says Gallagher also offers Liability Plus, an exclusive management liability solution that combines nine key covers in a single insurance package with the option to add Professional Indemnity cover as well.

“With its broad policy coverage and extensive market-leading benefits, Liability Plus is a premier liability insurance solution for Kiwi businesses.”