About Property Liability Insurance

Aside from property insurance, business owners should also consider buying property liability insurance. This type of protection also offers a lot of advantages that a business can benefit from. Know the basics of this insurance and decide for yourself whether getting it is beneficial for your company or not.

What the Insurance Covers

Property liability insurance provides your business protection against third party bodily injuries and property damages in which your company is legally held liable.

  • Bodily injuries - In the event of someone's injury caused by an accident within the premises of your establishment, the insurance covers the expenses of the victim's medical treatment. For example, a customer fractured a bone while eating in your restaurant because the chair broke, or debris fell on someone while your business was under renovation, the insuring company covers the cost of medication or hospitalization of the injured party.
  • Property damages - In circumstances where your business hinders the use of another one's property or damages it, the insurance provider pays the owner the costs of the destroyed facilities or repair expenditures. If the property can no longer be used because of an accident caused by your business, the insurer will also reimburse the loss of use of that property.
In addition to these coverages, property liability insurance also protects you against the costs involved in lawsuit proceedings. These includes lawyer fees, witness fees and police investigation report expenses.

Factors Affecting the Coverage and Premium Cost

Liability coverage is determined by several components. Businesses' risks are evaluated by the insurance provider. The evaluation serves as a determinant for what protection they are willing to cover in the policy. Some factors that will affect the cost of the premium and the scope of insurance coverage are:
  • the type of business you operate
  • the type of products your business sells
  • location of the business (whether it is exposed to frequent perils or not)
  • safety and prevention measures administered by the business to prevent accidents

A business that belongs to a high-risk business class pays larger premiums than a company evaluated as low-risk.

Combining Property and Liability Insurance

Insuring firms offer a business insurance policy that combines property and liability insurance. It is called business owner's policy (BOP), an insurance plan specially designed for small to medium-sized businesses. The incorporation of two types of insurance in a single policy makes the rate lower and more affordable. BOP still provides a comprehensive protection coverage for the business even if the premium is lesser.

 

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