This is how business liability insurance protects you!

Business liability insurance is essential. Businesses, such as landscapers, need different types of insurance coverage to ensure they protect themselves against claims made against them due to negligence, poor quality, breach of contract, and many other possibilities.

Here are the different areas where insurance is vital in protecting a business.

compensate workers

In Canada, workers’ compensation laws are largely administered by local governments. Business insurance should cover employee compensation. Insurance against the risk of claims for damages is important because injuries can and do happen at some point in a company’s life. A worker is entitled to compensation if they are injured at work or are exposed to unnecessarily dangerous working conditions.

Although Canada has a relatively healthy balance of public and private health care, the cost of an injury can still be very high – especially if the injury prevents a worker from earning money. This means that claims for damages can include very large sums of money. Protecting against losses caused by these claims is a very important part of business insurance coverage.

Product Damage Handling

Coverage for payments made to consumers who have suffered property damage as a result of a product or service is offered by companies such as KBD Commercial Insurance Quebec. Consumers have the right to claim compensation for damage caused by products or services.

Handling customer claims for damages

Likewise, claims for damages from consumers who have been harmed by a product or service must be covered. Injuries can be caused by defective products, poor safety instructions and poorly trained personnel. Businesses need to hedge against the possibility that their products will fail or be unfit for purpose.

Protection against business-to-business claims

When a company is regularly contracted to supply products and services for another company, it must insure against the possibility that it cannot fully perform the contracted products and services. Subcontractors are liable for non-compliance with the agreed targets.

It is imperative – and in many cases a legal requirement – that subcontractors cover potential shortfalls to ensure contractors are adequately compensated. In Canada, for example, subcontractors are required to have $5 million in coverage for this purpose.

Protection against material shortages

No company is an island. Offering products often involves an interconnected system of subcontracting with manufacturers and material suppliers. As you might expect, this can sometimes cause problems.

Defective or inferior materials may result in the manufacture of inferior products. In turn, these substandard products can lead to injuries, lack of promised functionality and many other problems. Businesses need to insure themselves against the very real possibility that material defects will damage their reputation, profits and consumer safety.

Funds claimed by insurance companies to cover these losses are typically spent paying customer compensation and paying attorneys’ fees for compensation claims against the material suppliers responsible.

Business Insurance article and permission for publication here provided by Carol Trehearn. Originally written for Supply Chain Game Changer and published on January 28th, 2022.

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