General liability insurance covers injuries or property damage that you cause to third parties through the operations of your business. If someone sues you for personal injuries or property damage, the cost of defending and resolving the suit would be covered by your liability insurance policy. A general liability policy will cover you for common risks, including customer injuries on your premises and damages caused by your product or service. Other types of liability insurance include:
Errors and Omissions Insurance
Errors and omissions (“E & O”) insurance covers inadvertent mistakes or failures that cause injury to a third party. The act must actually be an inadvertent error, and not merely poor judgment or intentional acts. For example, an E & O policy would cover damages arising from an insurance agent failing to file policy applications, or a notary forgetting to fill out notarization’s properly.
Malpractice insurance, or professional liability insurance, pays for losses resulting from injuries to third parties when a professional’s conduct falls below the profession’s standard of care. For example, if a doctor makes a mistake that other doctors of his specialty would not have made, his patient might sue him. A malpractice policy will pay his defense costs and any judgment or settlement. Malpractice insurance is available for doctors, dentists, accountants, real estate agents, architects, and other professionals.
Directors’ and Officers’ Liability Insurance
This type of insurance is generally purchased by corporations and nonprofit organizations to cover the costs of lawsuits against directors and officers.
Liquor Liability Insurance
This would cover someone the produces and/or sells an alcoholic beverage that would impair or increase the impaiment of an individual. For example this policy would provide defense and settlement costs if a person blames their car accident on you for selling them alcohol when they were already intoxicate. As crazy as that sounds, businesses that provide alcohol are not allowed to sell to someone already intoxicated so this coverage is a must for any bar, convenience store, restaurant, caterer, etc.